ITO, WARD - 2(1), GORAKHPUR vs. SMT. NEHA GUPTA, GORAKHPUR

The ld. CIT(A) has deleted the said addition observing as under: “A perusal of the submission made by the appellant shows that the appellant has disclose total turnover of Rs.60,47,127/- during the year under consideration. Total cash available as on 8/11/2016 was Rs.27,15,267/. The appellant has deposited Rs.37,79,000/- during the demonetization period. This amount was P a g e | 3 ITO-2(1) Vs. Smt. Neha Gupta realised from sale of goods. All the deposits in bank is properly mentioned in the books of account and tax audited u/s 44AB of the Act. The AO has not rejected the books a/c nor has pointed out any material defect in them thus implying that the books of a/c were correct and the results obtained through them were acceptable to the AO. The AO has added Rs.25lakhs out of the total deposit out of Rs.37,79,000/- the AO has not provided any reason or basis for taxing Rs.25 lakhs only out of the total deposits made by the appellant. The books of the a/c and the results are substantiated by proper bills and vouchers furthermore no adverse inference has been drawn by the AO in this regard. The AO has made the addition u/s 69A of the Act without making any third party enquiry which is incorrect. The appellant has submitted the nature and source of the deposits it was the duty of the AO to controvert the same however nothing has been brought on record by the AO except for his assumption that it was a false and cooked up story. The appellant had sufficient cash balance from sale by him to deposit the amount in the bank. The AO has not doubted the purchase and stock of the appellant. It is clear that the addition has been made purely on the assumption, it has been held through a number of the judgement that the additions made on the basis of assumptions and surmises which are not backed by any sufficient evidences and reasons are unsustainable in the eyes of the law. In view of the above I find that addition made by the AO is not according to the facts of the case hence the same is directed to be deleted.”

After hearing both the parties on perusal of the relevant material placed on record, it is seen from the perusal of the submissions made before the AO and the details of cash summary that as per books, total cash available as on 08.11.2016 was Rs.27,15,267/-. This amount has been shown from realization from sale of goods, duly recorded in the books and all the deposits in the bank has been duly mentioned in the books of account in the tax audit report u/s 44AB. Out of these amount shown in the books, assessee had deposited Rs.27,00,000/- on 16.11.2016 and balance sum has been deposited in the month of December 2016. Nowhere the AO has given reason as to why assessee’s books of account are to be rejected or what is the basis of making adhoc addition of Rs.26,00,000/- out of all the deposit. Once, the assessee had submitted the nature and source of deposit, which is out of duly recorded sales in the books and availability of cash, have been duly disclosed in the cash book, then there is no reason for making such addition. Accordingly, we don’t find any reason to tinker with the finding

In the result, the appeal of the revenue is dismissed.