ASSISTANT COMMISSIONER OF INCOME TAX-17(1) MUMBAI, MUMBAI vs. FAIRDEAL ELECTRONICS, MUMBAI

We observe that in the CO as well, there is a delay of 9 days in filing the same, on which the Assessee has stated that the notice of hearing on 26.06.2025, against which the assessee was supposed to file cross objection on 28.07.2025, was received by the Office Assistant of Assessee’s Chartered Accountant, who instead of handed over the said notice to the Assessee’s Chartered Accountant, somehow kept the same in his drawer and forget to inform the Ld. Chartered Accountant, which resulted into delay of 9 days in filing of instant CO. The delay occurred was neither intentional nor malafide or willful but beyond the control of the assessee. Considering the reason stated by the assessee for condonation of delay in filing of CO, as reasonable and plausible, the delay is condoned.

Coming to the merits of the case, we observe that in the instant case, the Assessing Officer in compliance to the order dated 22.03.2022 u/s 263 of the Act, in setting aside proceedings, framed the assessment denovo and by considering the fact “that the assessee had declared its total income of Rs. 28,15,120/- by filing its return of income on 30.10.2017 and as per the audited financials, has disclosed a turnover of Rs. 40,87,76,295/-“, held the books of account of the Assessee, as not reliable, as cash deposit were round figures which were abnormal. Further the cash register does not contain & CO No. 211/M/2025 Fairdeal Electronics

The Ld. Commissioner in impugned order considered the reasons cited by the Ld. AO for not accepting and rejecting the books of account, as non-convincing, by observing in impugned order as under.

The Ld. Commissioner, however ultimately affirmed the addition {Rs. 1,27,90,780/-} to the extent of Rs. 6,93,095/- only by observing and holding as under:

Both the parties being aggrieved have preferred their respective appeal and CO, which are under consideration before us. & CO No. 211/M/2025 Fairdeal Electronics

We have heard the parties and perused the material available on record. Admittedly, the Ld. Commissioner has thoroughly examined the reason for rejecting the books of account by the Assessing Officer and ultimately did not ascribe such view of the Assessing Officer and therefore accepted the explanation of the Assessee to rely on its audited account. Further the Ld. Commissioner, also considered the cash balance, as per books of account, available as on 08.11.2016 to the extent of Rs. 1,03,68,905/- and the amount deposited in SBN to tune of Rs. 1,10,62,000/- and ultimately treated the differential amount of Rs. 6,93,095/-, as unexplained money.

In our considered view, the decision of the Ld. Commissioner in deleting the main addition and sustaining the remaining part of addition, is based on the independent verification of the facts qua availability of cash amount before the demonization and/or as on 08.11.2016 and the amount deposited by the Assessee during the demonization in ‘SBN’ and ‘New Currency’, as well as books of account and cash book furnished by the Assessee. We even otherwise, do not find any material or reasons to contradict findings of the Ld. Commissioner, in deleting the addition of Rs. 1,10,62,000/- to the extent of Rs. 1,03,68,905/- and sustaining the addition to tune of Rs. 693095/- being differential amount, between the amount deposited by the assessee during the demonetization period in SBN and the cash balance available in the books as on date 08.11.2016. Thus, on the aforesaid reasons, instant appeal and CO respectively filed by the Revenue Department and the Assessee, are liable to be dismissed. & CO No. 211/M/2025 Fairdeal Electronics