DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE, BALLARI vs. SHRI. SRIPAL DEVICHAND JAIN, KALABURAGI

O R D E R

Per Laxmi Prasad Sahu, Accountant Member

2. The revenue has raised the following grounds of appeal:-

1) Whether on the facts and circumstances of the case and in law the Ld. CIT(A) was correct in estimating the sales of the assessee for the part period on the basis of additional evidence filed by the assessee during appellate proceedings without following the procedure laid down in Rule 46A of the I.T.Rules? 2) Whether on the facts and circumstances of the case and in law the Ld. CIT(A) was correct in re-estimating the sales for period Jan/Feb 2021 s well as reduction in GP on the basis of details furnished by the assessee, without confronting the same to the Assessing Officer and without appreciating that the same was not logical ? 3) Whether on the facts and circumstances of the case and in law the Ld. CIT(A) was correct in giving relief to the assessee on the issue of GP estimation and the sales estimation? For the above grounds and any additional grounds that may be agitated during the course of hearing it is prayed that the order of the Ld.CIT(A)-2, Panaji may be quashed and that of the AO restored.

“1. The order of the learned authorities, in so far as it is against the Respondent/ Cross Objector is opposed to law, equity, weight of evidence, probabilities natural justice, facts and circumstances of the case. & CO No.11/Bang/2023 Page 3 of 26

3. The learned Commissioner of Income Tax [Appeals] is not justified in holding that the Respondent/ Cross Objector failed to discharge the burden of proof that that the entire cash was on account of sale of jewellery in the normal course of business and consequently ought to have deleted the entire addition of a sum of Rs. 1,30,63,520/- on the facts and circumstances of the case. 4. Without prejudice, the learned Commissioner of Income Tax [Appeals] failed to appreciate that the entire addition is unsustainable in law as learned Assessing Officer has merely disbelieved the sales of the Respondent / Cross Objector although there were no discrepancies in the purchases, stock or books of account of the Respondent/ Cross Objector on the facts and circumstances of the case. 5. Without prejudice, the learned Commissioner of Income Tax [Appeals] failed to appreciate that the entire cash pertains to the business transactions of the Respondent / Cross Objector and consequently the learned Assessing Officer was not justified in invoking the provisions of section 69A r.w.s 11SBBE of the Act on the facts and circumstances of the case. 6. Without prejudice and not conceding that the cash seized was out of unexplained sources and from the business of the assessee, the sum of Rs. 54,62,298/ - at best shall be treated as profits earned out of business, since there was no other source of income, on the facts and circumstances of the case. 7. The Respondent / Cross Objector craves leave to add, alter, delete, substitute or modify any of the grounds urged above. 8. For the above and other grounds that may be urged at the time of the hearing of the appeal, the Respondent / Cross Objector prays that the appeal may be allowed in the interest of equity and justice.” & CO No.11/Bang/2023 Page 4 of 26

8. Consequent to search/requisition, notice u/s 143(2) was generated and issued electronically on 01.10.2021 and further notices & CO No.11/Bang/2023 Page 6 of 26 u/s.142(1) were issued along with questionnaire to the assessee calling for books of account and relevant details. In response to notices issued, the assessee filed copies of ITR-V with statement of computation of total income, statement of accounts i.e., Profit & Loss a/c, Balance sheet, Note on nature of business activities and sources of income, list of bank accounts, loan accounts with account extracts, monthly purchases & sales, cash book, Form No.26AS, monthly GST & annual returns, purchase and sales registers for the year, statement of total turnover and Gross profit declared for AYs 2015-16 to 2021-22, stock register along with valuation of Opening & Closing stock, list of unsecured loans with letters of confirmations, list of sundry creditors with confirmations, note on cash found and seized by the department of Rs.1.48 crores, cash book, etc. through e-filing portal.

“ The cash found and seized in my possession of Rs.1.48 Crores is out of regular business sales of gold, silver articles and jewellery. The same is duly evidenced from the sales bill furnished by me before the ADIT (Inv), Gulbarga in response to the summons issued u/s 131 of the Act pursuant to initial statement recorded on 06/02/2021. Further, I have already furnished GST returns filed by me for the aforesaid period whereby the safes reflected above is matching with the sales as per the books. It may not be out of place to mention that I have already furnished cash book in Annexure 3 above, whereby it can be seen that I was in possession of the cash in hand in my books on the date of the seizure of cash in the month of February, 2021. & CO No.11/Bang/2023 Page 7 of 26 Therefore, I strongly object to the proposition of treating the amount of cash seized as income u/s section 69A of the Act, as the source is duly furnished along with corroborative evidence in this regard.”

14. The ld. AR reiterated the submissions made before the lower authorities and filed written synopsis as under:-

“7. The AO without considering the submissions and documents furnished by the assessee completed the assessment proceedings vide order dated 31.03.2022 passed under section 143(3) of the Act determining the total income of the assessee at Rs. 1,62,63,910/- as under:- Particulars Amount in Rs. Returned income 31,90,390 Add: Unexplained cash/ money 1,30,63,520 assessed under section 69A of the Act Assessed income 1,62,53,910

………… & CO No.11/Bang/2023 Page 11 of 26

by the revenue for the kind consideration of this Hon’ble Tribunal.

15. Whether on the facts and circumstances of the case and in law the Ld. CIT(A) was correct in estimating the sales of the assessee for the part period on the basis of additional evidence filed by the assesse during appellate proceedings without following the procedure laid down in Rule 46A of the I.T. Rules? Whether on the facts and circumstances of the case and in law the Ld. CIT(A) was correct in re-estimating the sales for period Jan/Feb 2021 as well as reduction in GP on the basis of details furnished by the assessee, without confronting the same to the assessing officer and without appreciating that the same was not logical? a) The assessee is a wholesaler and retailer in gold and silver articles. The Deputy Superintendent of Police had intercepted a vehicle on 05.02.2021 and seized cash of Rs. 1.48 crores. The information was passed on to the department. A statement was recorded from Sri. S. Mahesh who stated that the cash was given to him by his employer i.e., the assessee. b) The assessee appearing before the ADIT(Inv.), Gulbarga on 11.02.2021 and stated that the case found of Rs. 1.48 crores is out of the sales for the month of January 2021 and February 2021 upto 04.02.2021 and in support of the same the assessee furnished the cash book, purchase register, purchase bills, sales register and sales bills for the F.Y. 2017-18 to 2019-20 and for the F.Y. 2020-21 upto 04.02.2021. The assessee reiterated the said submissions and furnished supporting documents before the AO. c) The AO did not accept the submissions of the assessee and accordingly rejected the submissions of the assessee that the cash seized represents the sales of the assessee for the months of January 2021 and February 2021 upto 04.02.2021. However, the AO considered the average sales for the months of January and first week of February 2021 for the three F.Ys. 2017-18, 2018-19 and 2019-20 and arrived at a sum of Rs. 17,36,480/- as the actual genuine sales of the assessee for the period 01.01.2021 to & CO No.11/Bang/2023 Page 12 of 26 04.02.2021 and gave credit for the same against the total cash seized of Rs. 1,48,00,000/-. Accordingly, computed addition of a sum of Rs. 1,30,63,520/- (Rs. 1,48,00,000/- less Rs. 17,36,480/-) under section 69A of the Act. d) The relevant portion of the assessment order where the AO has estimated the actual, genuine sales of the assessee for the period 01.01.2021 to 04.02.2021 is reproduced below for ready reference – “6.6 Year-wise Average Sales for the month of January & First week of February are tabulated as under:

Financial Year Month 2017-18 2018-19 2019-20 Average sales January 10,49,567 25,94,298 7,45,700 14,63,190 February 1,93,092 5,24,143 1,02,637 2,73,90 (upto 04/02/2021)

However, taking into consideration the Average Sales for the Months of January and first week of February as tabulated above for the previous three F.Ys – 2017-18, 2018-19 & 2019-20, the average sales for the month of January works out to Rs. 14,63,190/- and for the first week of the month of February works out to Rs. 2,73,290/-, the sum of which adds upto Rs. 17,36,480/- which is considered to be actual & genuine sales of the assessee for the period from 01/01/2021 to 04/02/2021 and given credit accordingly to the said extent, and balance amount of Rs. 1,30,63,250/- [Rs. 1,48,00,000/- (-) Rs. 17,36,480/-] is treated as Unexplained Money and brought to tax u/s 69A of the act, and charged to tax u/s 115BBE of the act.” e) The assessee submits that the above estimation of the alleged actual/ genuine sales was done without giving the assessee an opportunity to make any submissions with respect to the same. f) Before the CIT(A), the assessee, inter alia, contended that the estimation of sales for the period 01.01.2021 to 04.02.2021 by & CO No.11/Bang/2023 Page 13 of 26 the AO is without considering the prevailing gold rates for the year, stock in hand, impact due to Covid-19 pandemic, etc. g) The assessee made detailed submissions with respect to the estimation of sale vide written submissions dated 03.11.2021 which is available at Pages 71 – 281 of the paperbook. The relevant portion of the written submissions are reproduced by the CIT(A) at Para 4.18 of the order and are available at Page 81 of the paperbook. h) The assessee’s contention before the CIT(A) with respect to the estimation is summarized as follows – i) Increase in rate of gold during the year - The assessee submitted that there was increase in gold rates during the year in as much as the gold prices soared upto Rs. 5,500 per gram and were not trading below Rs. 4,500 per gram. The assessee furnished copy of gold prices for the months of January 2018, January 2019 and January 2021 to justify the same. Copy of the same is at Pages 267 – 273 of the paperbook. ii) Year 2020 was impacted by Covid-19 pandemic which lead to reduced sales in the initial 6 months of FY 2020-21 due to lockdown and other curbs imposed by the Government from time to time. Consequently, the sales increased due to relaxation of curbs and lockdowns by the end of November and December 2020 and therefore, there was spurt in sales for the period from January 2021. iii) Business in F.Y. 2019-20 to be excluded on account of the assessee having been through a major car accident in the month of June 2019 due to which the assessee was mentally disturbed on account of which the assessee did not undertake major transactions during the F.Y. 2019-20. Copy of the prescriptions issued by doctors are at Pages 274 to 277 of the paperbook. iv) The estimation of sales should be based on the quantity rather than the amount of sales considering the fact that the quantity of sales has increased and coupled with the increase in the gold prices, the sales declared by the assessee was in sync with the estimation, if done based on quantity of sales. & CO No.11/Bang/2023 Page 14 of 26 i) The CIT(A) after due consideration of the assessee’s submissions, held that the estimation done by the AO was incorrect and that the same needed to be estimated again excluding the sales of January 2021 and February 2021 and also factor the increase in the gold prices. Accordingly, the CIT(A) sought for submissions from the assessee in this regard which was done vide written submissions dated 15.11.2022 along with supporting documents which are at Pages 282 to 506 of the paperbook. j) Along with the written submissions dated 15.11.2022, the assessee furnished the following – i) Sales register along with VAT/ GST return for the F.Y. 2012- 13 to F.Y. 2018-19. ii) Tabulated data of quantity of sales, average rate per gram and amount of sales year wise. iii) Average sales growth data based on the above tabulated data. iv) Tabulated data of quantity of sales, average rate per gram and amount of sales for the month of January 2013 to 2019. v) Average sales growth for the month of January based on the above tabulated data. k) Based on the above details and similar to the principle adopted by the Assessing Officer to estimate sales based on earlier year trends, the CIT(A) has computed the quantity of sales for the period of 01.01.2021 to 04.02.2021 to be 2,085 grams and applying the average rate per gram of Rs. 4,272 per gram and arrived at estimated actual/ genuine sales for the period 01.01.2021 to 04.02.2021 at Rs. 89,06,634/- (excluding GST) and at Rs. 91,73,833/- (including GST) as against the sales estimated by the AO of a sum of Rs. 17,36,480/-. l) Accordingly, the CIT(A) has restricted the addition to Rs. 56,26,167/- (Rs. 1,48,00,000/- less Rs. 91,73,833/-) as against the addition made by the AO of a sum of Rs. 1,30,63,520/-. & CO No.11/Bang/2023 Page 15 of 26 m) The assessee submits that all the details available with the CIT(A) for the purpose of estimating the sales during the period 01.01.2021 to 04.02.2021 at a sum of Rs. 91,73,833/- were available with the AO as well and consequently the question of the said details being termed as additional evidence and the requirement to follow the procedure contemplated in Rule 46A of the Income Tax Rules does not arise. n) During the course of the assessment proceedings, notices under section 142(1) of the Act were issued by the AO and the assessee furnished the details called for by the AO. The details furnished are noted by the AO in Para 5 of the assessment order which is reproduced below for ready reference – “5. In response to notices issued, the assessee has filed copy of ITR-V with Statement of Computation of Total Income and Statement of Accounts i.e., Profit & Loss A/c and Balance Sheet, Note on nature of business activities and sources of income, List of Bank accounts, Loan account with account extracts, Monthly Purchases & Sales, Cash Book, Copy of F.No.26AS, Copy of monthly GST and Annual return, Purchase and Sales Registers for the year, Statement of Statement of total turnover and Gross Profit declared for the Asst. Years – 2015-16 to 2021-22, Copy of Stock Register along with Valuation of Opening & Closing Stock, List of Unsecured Loans with letters of confirmations, List of Sundry Creditors with confirmations, Note on cash found and seized by the department of Rs. 1.48 crores, Copy of Cash Book etc., for information. The said details have been submitted by the assessee through e-filing portal. After verification of details furnished by the assessee and in consonance with the material on record, the assessment is completed with following additions to the total income declared in the return filed u/s 139(1) of the Act.” o) The assessee submits that he was not furnished with an opportunity to assist the AO in the estimation of the actual sales and the same was done by the AO suo moto without application of mind. All the details furnished to the CIT(A) were available with the AO and consequently the same cannot be said to be additional evidence in order to apply the provisions of Rule 46A of the Income Tax Rules. The same is clear from Para 5 of the assessment order wherein the AO has noted the details submitted & CO No.11/Bang/2023 Page 16 of 26 by the assessee during the course of the assessment proceedings and therefore to now turnaround and say that the same were additional evidence submitted before the CIT(A) is perverse. p) The assessee has furnished the relevant details submitted before the CIT(A) as well as the AO which are pertaining to the computation of the estimated sales during the period 01.01.2021 to 04.02.2021 in the paperbook filed by the assessee. The comparative chart with page numbers references to the paperbook filed before the Tribunal below clearly demonstrates that most of the details furnished before the CIT(A) which aided the CIT(A) in computing the estimated sale of Rs. 91,73,833/- were already available with the AO.

Details furnished to the Page No. Details furnished to the Page No. AO reference to CIT(A) reference to the the paperbook paperbook VAT monthly and annual 516 – 542 VAT monthly and annual 311 – 337 Return (A.Y. 2015-16) Return (A.Y. 2015-16) VAT monthly and annual 568 – 594 VAT monthly and annual 345 – 371 Return (A.Y. 2016-17) Return (A.Y. 2016-17) VAT Monthly and annual 619 – 645 VAT Monthly and annual 378 – 404 Return (A.Y. 2017-18) Return (A.Y. 2017-18) VAT Monthly Return – 674 – 709 VAT Monthly Return – 415 – 450 upto Jun 2017 & GSTR- upto Jun 2017 & GSTR- 3B from Jul 2017 (A.Y. 3B from Jul 2017 (A.Y. 2018-19) 2018-19) GST Monthly returns Filed 756 – 791 GSTR-3B Monthly returns 467 – 502 (A.Y. 2019-20) (A.Y. 2019-20) Sales Register (A.Y. 2015- 543 – 558 Sales Register (A.Y. 2015- 302 – 309 16) 16) Sales Register (A.Y. 2016- 596 – 609 Sales Register (A.Y. 2016- 338 – 343 17) 17) Sales Register (A.Y. 2017- 647 – 657 Sales Register (A.Y. 2017- 372 – 375 18) 18) Sales Register (A.Y. 2018- 711 – 716 Sales Register (A.Y. 2018- 405 – 411 19) 19) Sales Register (A.Y. 2019- 747 – 755 Sales Register (A.Y. 2019- 458 – 466 20) 20) q) It is clear from the above, to the extent of the details tabulated above, submitted by the assessee to the learned CIT(A) for estimating the sales during the period 01.01.2021 to 04.02.2021 were already available with the learned AO. Consequently, to the extent of details tabulated above, it cannot & CO No.11/Bang/2023 Page 17 of 26 be said that the same were additional evidence submitted before the CIT(A). r) Similar details were furnished before the CIT(A) for the A.Y. 2013-14 and 2014-15 which is the basic details pertaining to the sales of the assessee. s) The prices of gold for various years are details which are available publicly and consequently the same cannot be said to be additional evidence. t) The assessee submits that the learned AO has chose to not use a rational basis for estimating the sales and has instead, without application of mind to the business of the appellant, has mechanically estimated the sales without considering the price rice, natural growth in business resulting in increase in quantity etc. It is not a case where the relevant details were not before the learned AO in order to state that additional evidence was furnished before the CIT(A). It is case where the AO chose to apply a completely different method which does not factor the business exigencies of the appellant and consequently the revenue cannot now be aggrieved that the learned AO was not provided an opportunity when the same details were furnished before the CIT(A). The assessee places reliance on the decision of the Hon’ble Madras High Court in the case of CIT v. Standard Press (India) P. Ltd. (2023) 151 taxmann.com 94 (Mad.). u) Without prejudice to the above submissions, the workings done by the learned AO were to estimate the sales during the period 01.01.2021 to 04.02.2021. Similarly, the CIT(A) also estimated the sales during the period 01.01.2021 to 04.02.2021. Therefore, the computation of sales for the period 01.01.2021 to 04.02.2021 is an estimate. Both the authorities have estimated the sale and they have chose to estimate the sales in a different manner based on the same details furnished to them. However, the estimate by the CIT(A) is a more realistic estimate considering various factors which are prevalent in the assessee’s line of business. When it is just a difference in the method of estimation, the question of any details furnished before the learned CIT(A), being additional evidence does not arise. The details furnished to the CIT(A) are just to aid the CIT(A) in & CO No.11/Bang/2023 Page 18 of 26 computing the estimated sales in a realistic manner which the learned AO failed to do despite having the same materials. v) Without prejudice, the assessee submits that in the instant case the details were furnished on the direction of the learned CIT(A) which is evident from Para 4.19 of the order of the CIT(A). The assessee had initially vide submission dated 03.11.2021 submitted that the estimation of sales of Rs. 17.36 lakhs is completely erroneous and unrealistic going by the market trends and the circumstances of the business on account of Covid-19 pandemic. After considering the said submissions, on the directions of the learned CIT(A), the assessee filed written submissions on 15.11.2022 along with details of sales registers, quantitative details and increase in gold prices. The fact that the same was on the direction of the CIT(A) is evident from Para 4.19 of the CIT(A) order. The relevant portion is reproduced below – 4.19 The aforesaid averments carry some weight. Once the AO accepted that the aforesaid cash seizure included some cash out of the legitimate business activities of the appellant, then he was duty bound to make a realistic estimate of the amount of such sales. The appellant has given cogent reasons backed by proof for low volume of sales in the FY 2019-20 (on account of personal inquiry which in a small-scale business being principally run by the owner himself can impact the business). Hence the AO needed to exclude the sales in that year to compute the scale of sales in January – February 2021. Further, the AO also needed to factor in the cost of gold and increase therein on YoY basis to arrive at the figure of sales. This has apparently not been done. Accordingly, the sale figure for this period needed to be estimated again. The same was done during the course of appellate proceedings on 15.11.2022 ……………… w) It is clear from the above that after considering the initial submissions of the assessee, the CIT(A) was of the opinion that the sales for the period 01.01.2021 to 04.02.2021 has to estimated again as the estimate of the learned AO was incorrect. Therefore, the CIT(A) requested the assessee to furnish further details in order to arrive at a realistic estimate of the sale considering various factors which affect its business. The same is in accordance with section 250(4) r.w. Rule 46A(4) of the Income & CO No.11/Bang/2023 Page 19 of 26 Tax Rules which states that nothing contained in Rule 46A shall affect the power of the learned CIT(A) to direct the production of any document. x) The assessee places reliance on the following decisions – i) CIT v. Sanu Family Trust (2012) 19 taxmann.com 105 (Kar.) ii) Smt. Prabhavati S. Shah v. CIT (1998) 231 ITR 1 (Bom.) iii) CIT v. Dev Musco Lighting (P.) Ltd. (2009) 316 ITR 209 (Del.) iv) DCIT v. NE Technologies India (P.) Ltd. (2014) 151 ITD 783 (Hyd. - Trib.) v) ITO v. Industrial Roadways (2008) 112 ITD 293 (Mum. - Trib.) y) The assessee submits that it is a settled position of law that the power of the CIT(A) is plenary and is co-terminus with that of the AO in as much as the CIT(A) can do what AO can do and also what the AO failed to do. The appellant places reliance on the decision of the Hon’ble Supreme Court in the case of CIT v. Kanpur Coal Syndicate (1964) 53 ITR 225 (SC) and Jute Corporation of India Ltd. v. CIT (1991) 187 ITR 688 (SC). z) Without prejudice, the assessee submits that the revenue has not brought anything on record to state that the estimation of the sales done by the CIT(A) is not sustainable. aa) In view of the above, the assessee submits that the question of the evidence produced before the learned CIT(A) being termed as additional evidence does not arise and consequently the assessee prays this Hon’ble Tribunal to dismiss the grounds raised by the revenue in this regard.

16. Whether on the facts and circumstances of the case and in law the Ld.CIT(A) was correct in giving relief to the assessee on the issue of GP estimation and the sales estimation? Estimation of sales a) The details of computation of estimated sales by the learned AO for the period 01.01.2021 to 04.02.2021 has been & CO No.11/Bang/2023 Page 20 of 26 elaborated above. The same is not reiterated again for the sake of brevity. b) The assessee submits that the above estimation of the alleged actual/ genuine sales was done without giving the assessee an opportunity to make any submissions with respect to the same. c) Before the CIT(A), the assessee, inter alia, contended that the estimation of sales for the period 01.01.2021 to 04.02.2021 by the AO is without considering the prevailing gold rates for the year, stock in hand, impact due to Covid-19 pandemic, etc. d) The assessee submits that the computation made by the learned AO was based on average sales for three years including the year in which sales was drastically impacted by Covid-19 pandemic. Further, during the F.Y. 2019-20 the assessee was subject a serious accident and was seriously injured and consequently business was affected and the same was to excluded for the purpose of computation. Estimation of gross profit e) The assessee’s contention has all along been that the entire cash seized of a sum of Rs. 1,48,00,000/- and accordingly the assessee declared the entire sum as sales in the return of income filed by the assessee. However, the learned AO did not accept the contention of the assessee has held that only a sum of Rs. 17,36,480/- is actual sales and the balance sum of Rs. 1,30,63,520/- are not genuine sales and accordingly treated the same as unexplained money under section 69A of the Act. The assessee had declared business income of Rs. 35,47,712/- which includes the gross profit on sales of Rs. 1,48,00,000/-. f) The assessee, without prejudice to its other contentions, contended before the CIT(A) that since sales to the extent of Rs. 1,30,63,520/- was considered to be not genuine, then the gross profit embedded on such sales amount has to be excluded from the business income as otherwise the same would amount to double taxation, once in the form of unexplained money and another in the form of gross profit included in the business income. & CO No.11/Bang/2023 Page 21 of 26 g) The learned CIT(A) accepted the submissions of the assessee and accordingly recomputed the business income at Rs.25,17,995/- after excluding the gross profit on the alleged recomputed bogus sales of Rs. 54,62,298/- (excluding GST). h) In fact, the assessee submits that the learned AO has resorted to estimation of the sale without rejecting the books of accounts which is impermissible in law. i) In view of the above, the assessee submits that the estimation done by the learned CIT(A) is a realistic estimate taking into consideration various factors which affect the business of the assessee. Consequently, the assessee humbly prays this Hon’ble Tribunal to dismiss grounds raised by the department in this regard. ”

15. The ld. AR further submitted that during the course of assessment proceedings all the documents were submitted by the assessee as per questionnaire issued by the AO u/s. 142(1) which is clear from the assessment order at para “5” and the same documents were produced before the CIT(Appeals). During the appellate proceedings, the assessee submitted only the data from Jan. 2013 for establishing that the assessee is engaged in the same line of business and the annual growth rate achieved by the assessee. Only medical certificate for the previous year was submitted because he was not well and the assessee could not perform his activities properly. Therefore there was no additional evidence produced by the assessee before the CIT(Appeals) and hence the ground raised by the revenue is not correct. He further submitted that on 11.02.2021 before the ADIT(Inv.), Gulbarga the same documents were filed from AY 2015- 16 upto 04.02.2021 on which no defects have been pointed out and same were filed during the course of assessment proceedings. The & CO No.11/Bang/2023 Page 22 of 26 assessee has also filed PB containing pages 1 to 924 and he submitted that these documents were filed during assessment as well as appellate proceedings which consisted of sales register, stock register, VAT return, cash book, bank statement from AY 2015-16 onwards. He further submitted that the AO without pointing out any defect in the documents and without rejecting the same, he cannot treat the turnover declared by the assessee as unexplained investment. Once he has accepted the turnover declared on the basis of which the assessee has calculated his business income, the same amount cannot be taxed twice by both the authorities by taking shelter of other provisions of the Act.. The AO has accepted the returned income of the assessee which was calculating on the basis of total turnover of the assessee. Therefore, the entire turnover declared by the assessee should be treated as business receipts. Accordingly he requested that the entire turnover declared by the assessee during the month of Jan. 2021 upto 4.2.2021 should be treated as business sales of the assessee. In support of his arguments, he relied on the following decisions:-

(i) Shri Balwinder Kumar in dated 31.1.2023 (ii) CIT v. Standard Press (India) P. ltd. (2023) 151 taxmann.com 94 (Mad) (iii) CIT v. Sanu Family Trust (2012) 19 taxmann.com 105 (Kar.) (iv) Smt. Prabhavati S. Shah v. CIT (1998) 231 ITR 1 (Bom) (v) CIT v. Dev Musco Lighting (P) Ltd. (2009) 316 ITR 209 (Del) (vi) DCIT v. NE Technologies India (P) Ltd. (2014) 151 ITD 783 (Hyd. Trib.) (vii) ITO v. Industrial Roadways (2008) 112 ITD 293 (Mum Trib) & CO No.11/Bang/2023 Page 23 of 26 (viii) CIT v. Kanpur Coal Syndicate (1964) 53 ITR 225 (SC) 16. After hearing both the sides, perusing the entire material on record and the orders of the lower authorities, we note that cash of Rs.1.48 crores was seized by the Police Officer and statements were recorded by the ADIT(Inv.), Gulbarga on 08.02.2021 in which the assessee stated that cash found was out of his own savings, family savings and loans. The assessee appeared before the ADIT(Inv.) on 11.02.2021 and stated that cash found of Rs.1.48 crores is out of sales for the month of Jan. & Feb. 2021 (upto 04.02.2021) and in support of this he produced cash book, purchase register, purchase bills, sales register and sales bills for FY 2017-18 to AY 2019-20 and upto 4.2.2021. During assessment proceedings, the assessee submitted the details as stated by the AO in para 5 of his order as under:-

5. In response to notices issued, the assessee has filed Copy of ITR-V with Statement of Computation of Total Income and Statement of Accounts ie., Profit & Loss Ale and Balance Sheet, Note on nature of business activities and sources of income, List of Bank accounts, Loan accounts with account extracts, Monthly Purchases & Sales, Cash Book, Copy of F.No.26AS, Copy of monthly GST and Annual returns, Purchase and Sales Registers for the year, Statement of total turnover and Gross Profit declared for the Asst. Years - 2015-16 to 2021-22, Copy of Stock Register along with Valuation of Opening & Closing Stock, List of Unsecured Loans with letters of confirmations, List of Sundry Creditors with confirmations, Note on cash found and seized by the department of Rs.1.48 Crores, Copy of Cash Book etc., for , information. The said details have been submitted by the assessee through e-filing portal. After verification of details furnished by the assessee and in consonance with the material on record, the assessment is completed with following additions to the total income declared in the return filed u/s 139(1) of the act.

& CO No.11/Bang/2023 Page 24 of 26