PRINTRADE ISSUES (INDIA) PRIVATE LIMITED ,MUMBAI vs. INCOME TAX OFFICER CIRCLE 8(2)(1), MUMBAI

Assessee has raised the following grounds of appeal: 1. On the facts and in law, the Learned CIT(A) erred in confirming the Order passed by the Learned Assessing Officer making addition to the tune of Rs.1,07,54,500/- under Section 68 of the Act on account of cash deposited in Bank. 2. On the facts and in law, the Learned CIT(A) erred by failing to appreciate that Appellant has sufficient cash in hand balance to make deposits in the bank. 3. On the facts and in law, the Learned CIT(A) erred by failing to appreciate that Ld. Assessing Officer has made impugned addition on vague reasons, such as withdrawal of additional cash even when Assessee had cash available in hand. 4. On the facts and in law, the Ld. Lower Authority have failed to appreciate that Appellant had sufficient cash in hand during year ending 31/03/2016, which was deposited during demonetization and therefore, impugned addition is arbitrary in nature and is therefore liable to quashed. 5. On the facts and in law, the Learned CIT(A) erred in appreciating that impugned Assessment Order has been passed in gross violation of n issued by CBDT dated 21/02/2017 and hence, impugned addition deserves to be quashed and set aside.

At the outset, it is observed that there is a delay of 134 days in filing the present appeal before the Tribunal. Assessee has filed an application for condonation of delay supported by an affidavit explaining the reasons for delay. Having perused the application and affidavit, and after hearing both parties, we are satisfied that there was sufficient cause for non-filing of the appeal within the prescribed period of limitation. Accordingly, delay of 134 days in filing the present appeal is condoned and the appeal is admitted for adjudication on merits.

Briefly stated, facts of the case are that assessee filed its return of income on 31.10.2017, reporting total income at Rs. 1,46,83,220/-. Case was selected for scrutiny through CASS for the reason of cash deposits made in the bank account during demonetization period. During the assessment proceedings, ld. Assessing Officer observed that assessee deposited Specified Bank Notes (SBNs) amounting to Rs. 1,07,84,500/- in its bank account maintained with Indian Overseas Bank, Branch N. M. Joshi Marg, Mumbai during demonetization period. In response to notices issued by ld. Assessing Officer, assessee submitted cash summaries and cash books. However, ld. Assessing Officer noted that books of account were not produced for verification. Ld. Assessing Officer also observed that cash book furnished with cash summary lacked day-to-day closing balances, contained only date-wise debit and credit entries and was not signed by the Director of the assessee company. Ld. Assessing Officer rejected the books of account u/s 145(3) and treated the cash deposit of Rs. 1,07,84,500/- [recorded as Rs. 1,07,54,500/- in the computation/grounds] as unexplained cash credit u/s 68. Aggrieved, assessee went in appeal before the ld. CIT(A).

Before us, ld. Counsel for the assessee submitted that assessee could not present complete details and documentary evidence before the authorities below due to bona fide reasons. It was submitted that assessee had sufficient opening cash balance in its audited books of account as on 31.03.2016 to the tune of Rs. 95,03,382/- which was deposited during demonetization period. It was prayed that one more opportunity may be granted to assessee to place all relevant books of account, bank statements and reconciliation statements on record before ld. CIT(A) to explain the source of cash deposit.

We have heard the rival contentions and perused the material available on record. Ld. Assessing Officer in his order has specifically noted as under: "4. But not produced the Books of account for verification with respect to the Source of cash deposit made in the bank account during the demonization period. From the details of submission of the assessee it is found that the assessee submitted cash book of F.Y 2014-15, 2015-16 and A.Y 2016-17 also with cash summary. On perusal of the cash book it is found that the entire cash book for all the three years lacks the day to day closing balances. In the cash book there is only debit and credit entry date wise. Furthermore the cash book does not bear any signature of the director. In view of the above the said cash book can-not be accepted as authentic cash book, on the basis as which any verification will be carried on."

In the result, appeal filed by the assessee is allowed for statistical purposes.