SHRI VISION STATIONERY PRIVATE LIMITED,MUMBAI vs. COMMISSIONER OF INCOME TA, NFAC, DEHI, MUMBAI

The Appellant has raised following grounds of appeals:

1. The learned CIT(A), NFAC, Delhi has erred both in law and on facts of the case in passing an order u/s 250 of the IT Act for AY 2012-13 on 31.03.2022.

Your Appellant craves leave to add, alter, amend and/or delete all or any of the grounds of Appeal

Being aggrieved, the Appeal filed against the Assessment Order before CIT(A). Substantial relief was granted by the CIT(A), however, the addition of INR 27,10,000/- relating unexplained cash credit was confirmed. Therefore, the Appellant has preferred the present appeal.

None was present for the Appellant when the appeal was taken up for hearing. The Learned Departmental Representative 2 Assessment Year: 2012-13 submitted that the addition of INR 27,10,000/- on account of unexplained cash deposit in the bank account of the Appellant was sustained by CIT(A) since the Appellant failed to provide copy of the cash book during the assessment proceedings and also substantiate the source of cash deposits in appellate proceedings before CIT(A). The CIT(A) had called for a remand report from the Assessing Officer. The Assessing Officer in his remand report pointed out the discrepancies in the explanation provided by the Appellant. As per the sales list provided by the Appellant a part of sales to particular party was reported to be made in cash and not the entire sales. Further, the cash receipts provided by the Appellant were issued in the month of August/September/December, 2011 whereas the cash deposits were made during the May, 2011 to July, 2011. On the basis of the aforesaid observations made by the Assessing Officer in the remand report, the CIT(A) concluded that the Appellant could not had deposited cash in the month of May to July 2011 when the cash was received in the month of August/September/December, 2011.

Departmental Representative and perused the material on record. We note that the Assessing Officer had made in addition of INR 27,10,000/- on account of unexplained cash deposits in the bank account of the Appellant since the Appellant had failed to produce the cash book. We note that in appellate proceedings the Appellant furnished copy of cash book for the relevant period showing transaction of cash receipts on various dates along with copy of bank statements. It was contended by the Appellant before CIT(A) that the source of cash deposited in the bank account consisted of cash sales 3 Assessment Year: 2012-13 of INR 9,39,650/-. to support the same the Appellant had filed „sales list‟ which provided details of sales made in cash and on credit. We note that in relation to the first objection made by the Assessing Officer in the remand report pertaining to part of the sales made to a particular party in cash and part of the sales made to such party on credit, the CIT(A) had observed as under: “4.4.4 Two glaring inconsistencies have been pointed out by the assessing officer at the remand stage.

The argument that part of the sale to a party was made in cash and part in cheque is very inconsistent and also appear to be improbable argument. However, as the revenue does not have any jurisdiction to suggest as to how a business has to run by an assessee, this observation can at the best be supporting evidence.” (Emphasis Supplied) 7. Thus, the CIT(A) noted that the first objection raised by the Assessing Officer in the remand report could at best be considered as supporting evidence. Therefore, the order of CIT(A) confirming the addition was based upon the second objection raised by the Assessing Officer that cash deposits were made in the month of May to July, 2011 whereas cash receipts were issued in the month of August/September/December, 2011. In this regard, we note that the Appellant had sales turnover of INR 14,97,05,798/- (including cash sale of INR 9,39,650/-). The Appellant had tried to explain the source of cash deposited in bank account by contending that cash was also received from trade debtors in respect of credit sales and the same was disclosed in the books of accounts. At this point, it would be pertinent to refer to the following observations made by the Assessing Officer in this regard in the remand report: 4

On perusal of above, we are of the view that while giving his comments/observations in the remand report the Assessing Officer did not carry out actual verification of the cash receipts from the parties making cash payments to the Appellant. The Appellant had furnished the Cash Book as well as Bank Statement. No discrepancy has been pointed out in the case. The CIT(A) decided the appeal on the basis of comments received from the Assessing Officer in the remand report without confronting the Appellant with the same. Keeping in view the aforesaid facts and circumstances we set aside the 5 Assessment Year: 2012-13 order passed by the CIT(A) and remand the issue back to the file of CIT(A) for adjudication afresh after giving Appellant an opportunity of being heard. Ground No. 1 stands disposed off in view of the aforesaid directions, whereas Ground No. 2 is disposed off as being infructuous.