GLASS CONCEPT INDIA PVT LTD,NOIDA vs. ITO, DELHI

The present appeal has been filed by the assessee against the order dated 08.10.2024 passed by Ld. Commissioner of Income Tax (A), National Faceless Appeal Centre (“NFAC”), Delhi [“Ld.CIT(A)”] in Appeal No.CIT(A), Delhi- 4/10886/2019-20 u/s 250 of the Income Tax Act, 1961 [“the Act”] arising from the assessment order dated 29.12.2019 passed u/s 143(3) of the Act pertaining to assessment year 2017-18.

Brief facts of the case are that during the year under appeal, the assessee is deposited a sum of INR 83,50,390/- in Karur Vysya Bank, 1-17, Sector-9, Noida branch in SBN during the demonetization period. The assessee is engaged in the business of processing and fabrication of glass and UPVC window and partitions. It was explained by the assessee that the immediate source of the said deposit is out of cash withdrawals made and the cash generated out of the sales made during the year prior to demonetization period. The AO has not accepted the claim of the assessee and made the addition of this amount. Ld.CIT(A) is also concurred the findings of the AO.

Before us, Ld.AR for the assessee submitted that the AO has made the addition of the cash deposit in bank by holding the nature and source of cash deposits was not explained. However, Ld.CIT(A) at the time of confirming the same, has treated them as deposits from the creditors of which the creditworthiness was not proved and had made the addition. Ld.AR submits that the deposits represent the sales made during the year which were credited to the P & L Account and the income declared was duly included in the profits declared by the assessee. However, since during the course of appellate proceedings, the assessee could not appear before Ld.CIT(A) therefore, the addition was confirmed by Ld.CIT(A). The Ld. AR submitted that when the sales has been accepted and provision of section 145(3) of the Act were not invoked, the cash deposited being the amount of cash sales could not be further added and the same would tantamount to tax an income twice, firstly, by including the profits in the total income and secondly, by again making the addition for the cash receipts of such sales. He therefore, prayed for the deletion of the addition so made.

On the other hand, Ld. Sr DR for the Revenue vehemently supported the orders of the lower authorities and submits that the assessee has failed to establish the source of cash deposits and no details were submitted either before the AO or before the Ld. CIT(A). Therefore, he prayed that addition made deserves to be upheld. 5. Heard both the parties and perused the material available on record. In the instant case, the addition was made on account of cash deposited during demonetization period in the bank account of the assessee. The immediate source of the same was explained as the realisation of cash sales. From the perusal of the orders of both the lower authorities, we find that the trading results declared by the assessee were accepted and the claim of the assessee that the cash represents the sales realisation was doubted. This has lead to double addition of an income which is not permissible in the eyes of law. Once the AO has accepted the sales and profits thereon is taxed therefore, the entire sales in the shape of cash deposits cannot be again added to the total income of the assessee. However, it is seen that nowhere in the proceedings before the Page | 2