S. S. DIAM PRIVATE LIMITED ,JAIPUR vs. INCOME TAX OFFICER, JAIPUR

4. The assessee craves your indulgence to add, amend or alter all or any grounds of appeal before or at the time of hearing.”

2.1 The assessee also filed an application under Rule 11 of the Income Tax Appellate Tribunal Rules, 1963 dated 25.10.2024 requesting admission of following additional grounds which could not be taken at the time of filing appeal : “Additional Ground No.

1. On the facts and in the facts and circumstances of the case and in law, the learned Assessing Officer has erred in making assessment in the hands of the company whereas the same was not in existence as on 31/3/2017, being struck off by R.O.C. Additional Ground No.

2. On the facts and in the facts and circumstances of the case and in law, the learned Assessing Officer has erred in making assessment in the hands of the company despite being made aware that company stood struck off as on 31/3/2017 by the R.O.C. Additional Ground No.

3. On the facts and in the facts and circumstances of the case and in law, the learned Assessing Officer has erred in not giving the benefit of telescoping of trading addition of Rs. 1,28,48,522/- vis-à-vis addition on account of bank deposits of Rs. 54,35,000/-. Additional Ground No. 4.

On the facts and in the facts and circumstances of the case and in law, the learned Assessing Officer has erred in making addition on account of G.P. rate of Rs. 1,29,48,522/- and again on application of such income in deposits in bank of Rs. 54,35,000/-.”

S.S. Diam Pvt. Ltd., Jaipur.

4. Before us, the assessee has further filed an application under Rule 29 of the Income Tax Appellate Tribunal Rules, 1963 dated 25.10.2024 requesting admission of additional/supporting evidences as earlier due to struck off of name of the Company from the Register of Registrar of Companies as on 1.11.2016 and disqualification of the directors of the Company by the Registrar of Companies from 1.11.2016 to 31.10.2022, the assessee were not in a position to furnish the relevant details and documents before the AO/CIT (A) for adjudication of the matter. It was further submitted by the assessee that to overcome the problems and difficulties caused by the action of the Registrar of Companies in striking off the name of the company, the CBDT had issued Circular F.No. 225/423/2017-I.T.A.II dated 29.12.2017 and letter F. No. 225/423/2017/I.T.A. II dated 18.4.2018 advising the Assessing Officers to take up matters before the Registrar of Companies/N.C.L.T for reviving the name of the companies so that assessment proceedings are completed in a legal manner. However, no such action has even been taken by the AO. The position had no material change before the ld. CIT (A), before whom also the assessee was precluded in making any compliance. Now the assessee is submitted papers, documents and copy of accounts etc. before the Tribunal as per Paper Book as under :

S.S. Diam Pvt. Ltd., Jaipur. Sr. No. Particulars Page No.

1. Copy of certificate of incorporation of the company dated 01 10/09/2009 issued by the R.O.C.

2. Copy of certificate of registration dt. 1.7.2010 issued under 02 Rajasthan VAT Act.

3. Extract of disqualifying the directors and striking off the 3-4 name of the company by the R.O.C.

4. Copy of letter dated 23/3/2018 submitted by Nitesh Agarwal, 5-6 Ex-director to the ITO Ward 7(2), Jaipur, informing the fact of striking of the name of the company byROC.

5. Copy of letter dated 16/12/2019 submitted by Smt. Bhagwati 7-10 Devi Ex-director to the ITO Ward 7(2), Jaipur informing the fact of striking of the name of the company by ROC 6. Copies of CBDT Circulars dated 29/12/2017 and 18/4/2018 11-14 for restoration of struck off companies for completing assessments in legal manner. 7. i. Copies of Trading & Profit and Loss account and balance 15-16 sheet. 17-19 ii. Copy of cash book 20 iii. Copy of purchase register 21-22 iv. Copy of Sale Register 23 v. Copy of stock summary 24-31 vi. Copy of bank account with Union Bank 32-34 vii. Copy of statement submitted to the Income Tax Department explaining the source of cash deposited during demonetization period. 35-75 viii. Copies of purchase vouchers with ledger accounts 76-102. ix. Copies of sales vouchers with ledger accounts The assessee has requested the Bench to admit the evidences furnished now. The documents now being submitted are imperative and crucial for discharge of justice in the case of the assessee.

S.S. Diam Pvt. Ltd., Jaipur.

S.S. Diam Pvt. Ltd., Jaipur. “ The assessee company was incorporated on10/09/2009 with the Registrar of Companies, Jaipur. The company was having two directors, viz. (1) Shri Nitesh Agarwal S/o Shri Shanker Lal, 38, Uniyara Garden, Jaipur and (ii) Smt. Bhagwati Devi D/o Shri Sushillal, 38, Uniyara Garden, Jaipur. A copy of Certificate of Incorporation of the company is available on Paper Book Page No.

1. The assessee company was mainly engaged in the business of gold and precious stones jewellery. The company is also registered under Rajasthan VAT Act. Copy of registration certificate dated 1st July, 2010 is available on Paper Book Page No.

6. In this letter, it was specifically mentioned that as the company failed to file financial statements and returns before the Registrar of Companies for the period ending 31/3/2014, 31/3/2015 and 31/3/2016, the directors of the company were disqualified and the Registrar of Companies, Rajasthan, Jaipur struck off the name of the company. The directors of the company were disqualified for the period 01.11.2016 to 31/10/2022. The position being so, the directors were not in a position to file return of income of the company as the name of the company was struck off. No other compliance of income tax notices was also possible. Besides letter dated 23/3/2018 addressed to ITO, Ward 7(2), Jaipur by Shri Nitesh Agarwal, further letter dated 16/12/2019 was also submitted by Smt. Bhagwati Devi, former director of the company, to the Assessing Officer, Ward 7(2), Jaipur. Copy of this letter is also S.S. Diam Pvt. Ltd., Jaipur. available on Paper Book Page No. 7-10. It is relevant to submit that the contents of these letters have been mentioned by the learned Assessing Officer in last para on Page 2 of the assessment order. The same is reproduced below :-

“ Thereafter a show-cause notice was issued on19/09/2019, fixing the case for hearing on 25/09/2019 which was also served to the assessee through Regd. Post for furnishing explanation with supporting documents with regard to source of cash deposited of Rs. 54,35,000/- during the demonetization period. In response to the same, Shri Nitesh Agarwal (Ex- Director of the company) attended and filed reply that there were 02 directors named Shri Nitesh Agarwal and Smt. Bhagwati Devi of the company. Due to not file financial statement return of the company for continuous period of 3 years, directors were disqualified for 05 years period. Sh. Nitesh Agarwal was disqualified for a period 01.11.2016 to 31.10.2022 and Smt. Bhagwatidevi was disqualified for a period of 01.11.2017 to 31.10.2022. Since both the directors of the assessee company are disqualified and now they cannot perform their duties and responsibility or powers as director of the company. Since both the directors have been disqualified, it is not possible for them to sign any documents on behalf of the company or make any reply on behalf of the company. Therefore, neither reply of notice u/s 133(6) can be filed nor return for A.Y. 2017-18 can be filed. The reply of the assessee is not acceptable as the company has mandatory to file his return before due date of filing of the return for AY 2017-18 and at that time the director were not disqualified, it shows that the company has not file their return intentionally or they do not want to file the same.” The perusal of the aforesaid para in the assessment order reveals that the learned Assessing Officer was not justified in taking the above position with respect to the facts of the case. It is apparent that the learned Assessing Officer failed to appreciate the facts brought to his knowledge and also miserably failed to appreciate the position of law with respect to the facts of the case. The learned Assessing Officer failed to reach to the logical conclusion that in the facts and circumstances of the case, when the directors were disqualified and the name of the company was truck off by the Registrar of Companies, Jaipur, the company was not in existence and there was no case with the learned Assessing Officer to proceed in the matter of assessment. However, caring a fig for the facts of the case, the learned Assessing S.S. Diam Pvt. Ltd., Jaipur. Officer concluded the assessment proceedings on 30/12/2019 under section 144 of the IT Act, determining total income as under :- (i) Addition u/s 69A (cash deposits in bank Rs. 54,35,000/- during demonetization period. (ii) Addition by way of GP rate application of Rs. 1,29,48,552/- 8% on remaining credits in bank account of Rs. 16,18,56,900 (Rs.16,72,91,900 – 54,35,000) Total : Rs. 1,83,83,550/- It is submitted that the assessment completed by the learned Assessing Officer in the face of the fact that the name of the company was struck off from the register of Registrar of Companies was bad in law. It is further submitted that to overcome the problems and difficulties caused by the action of the Registrar of Companies in striking off the name of the company, the CBDT had issued circular F. No. 225/423/2017-I.T.A.II dated 29.12.2017 and letter F. No. 225/423/2017/I.T.A. II dated 18/4/2018 advising the Assessing Officers to take up matters before the Registrar of Companies/N.C.L.T. for reviving the name of the companies so that assessment proceedings are completed in a legal manner. However, no such action has ever been taken by the learned Assessing Officer. Therefore, the assessment completed stands vitiated and deserves to be quashed. The copy of CBDT Circulars are available on Paper Book Page No. 11-14. It is also relevant to mention that assessment in this case has been completed on 30/12/2019 and the circulars of the Board were issued earlier to this date, i.e. 29/12/2017 and 18/04/2018. Therefore, the learned Assessing Officer had enough time for taking up the matter with the ROC/NCLT. Having not done this, the assessment order passed by the learned Assessing Officer deserves to be quashed. It is further submitted that even the learned CIT (A) could not evaluate and visualize the position of law in this regard and has erred in confirming the action of the learned Assessing Officer. The order of the learned CIT (A), in the facts and circumstances of the case, happens to be invalid and unlawful. Aggrieved with the order of the learned Assessing Officer, the assessee preferred appeal before the learned CIT (A). However, unfortunately, the learned CIT (A), without appreciating the facts of the case, dismissed the appeal of the assessee.

S.S. Diam Pvt. Ltd., Jaipur. Against the order of the learned CIT (A), the assessee is in appeal before the Hon’ble ITAT. It is submitted that while filing appeal in the case of the assessee on 02/09/2024, certain grounds of appeal could not be taken due to inadvertence. These grounds of appeal now taken are purely of legal nature and go to the root of the matter. These grounds of appeal do not require any additional evidence and arise out of the order of the learned Assessing Officer/learned CIT (A). A separate application has been submitted before the Hon’ble ITAT with a humble request for admission of the additional grounds. As the facts and circumstances of the case were peculiar and the directors were not in a position to make compliance before the learned Assessing Officer/before the learned CIST (A) as they stood disqualified for the period 1/11/2016 to 31/10/2022, the assessee is now submitting papers, documents and copy of accounts etc. in support of its submissions. The Hon’ble Tribunal is humbly requested to admit the evidences being furnished for the first time. Separate application under Rule 29 has also been filed in this regard. The assessee now comes to discuss first the addition grounds as under :- Additional Ground No.

1. On the facts and in the facts and circumstances of the case and in law, the learned Assessing Officer has erred in making assessment in the hands of the company whereas the same was not in existence as on 31/3/2017, being struck off by R.O.C.

AND Additional Ground No. 2.

On the facts and in the facts and circumstances of the case and in law, the learned Assessing Officer has erred in making assessment in the hands of the company despite being made aware that company stood struck off as on 31/3/2017 by the R.O.C.

As submitted in the foregoing paras, on account of non-filing of financial statements by the company for past three years, the directors of the company were disqualified from 1/11/2016 to 30/10/2022 and the name of the company was struck off from the register of R.O.C. During the course of assessment proceedings, these facts were brought to the notice of the learned Assessing Officer by the directors under their letter dated 23/3/3018 and 16/12/2018, copies of which are S.S. Diam Pvt. Ltd., Jaipur. available on paper book page no. cited supra. It is submitted that copy of relevant extract containing the name of the company being struck off by R.O.C. Rajasthan was also furnished before the learned Assessing Officer. A copy of the same is also available on Paper Book page no. cited sputa. It is settled position of law that once the name of the company is struck off, it seizes to exist. In the case of the assessee, the name of the company was struck off on 1/11/2016, as such, the company did not exist as on the date of closing of the financial year 2016-17. There was no company in existence and hence, no assessment proceedings could be taken up validly and legally against the company which was not in existence. In view of this, assessment completed in this case is invalid and deserves to be quashed. The above position of law is further strengthened by the stand taken by the CBDT in their Circulars dated 29/12/2017 and 18/4/2018, copies of which are available on Paper Book Page No. cited supra. In these circulars, the Board had advised the field authorities to move before NCLT/ROC for revival of the companies where assessments are to be completed. In this case, nothing of this sort has been done by the learned Assessing Officer. Therefore, the order passed by the learned Assessing Officer is invalid. Subsequently, the order passed by the learned CIT (A) sustaining the aforesaid invalid order of the learned Assessing Officer is also bad in law. The Hon’ble Tribunal is humbly requested to allow the appeal of the assessee by quashing the assessment order passed by the learned Assessing Officer as well as the appellate order passed by the learned CIT (A).

Now the additional ground No. 3 & 4 and regular grounds No. 1 & 2 are taken together and discussed as under :- Additional Ground No.

3. On the facts and in the facts and circumstances of the case and in law, the learned Assessing Officer has erred in not giving the benefit of telescoping of trading addition of Rs. 1,29,48,522/- vis-à-vis addition on account of bank deposits of Rs. 54,35,000/-. & Additional Ground No.

4. On the facts and in the facts and circumstances of the case and in law, the learned Assessing Officer has erred in making addition on account of G.P. rate of Rs. 1,29,48,522/- and again on application of such income in deposits in bank of Rs. 54,35,000/-. & Regular Ground No. 1.

Under the facts and circumstances of the case, the learned CIT (A) has erred in confirming the addition of Rs. 54,35,000/- u/s 69A of the Income Tax Act, 1961 on account of cash deposited in the bank account during the period of demonetization. Regular Ground No. 2.

Under the facts and circumstances of the case the learned CIT (A) has erred in confirming the addition of Rs. 1,29,48,552/- by applying the 8% NP rate on entire credit entries in the bank account during the year (except Rs. 54,35,000/-, for which addition has also made u/s 69A of the Income Tax Act, 1961 on account of cash deposited in the bank account during the period of demonetization).

It is submitted that the assessee is doing the business of gold and precious stone jewellery. Books of accounts consisting Cash book, ledger, stock register, vouchers of purchase and sale etc. have been kept. a. Balance sheet, trading and P & L account. b. Cash book, purchase register, sale register and stock summary. c. Bank account with Union Bank. d. Copy of statement of cash sales furnished to the Income Tax Department explaining the source of deposit of cash in bank during demonetization period. e. Copy of purchase vouchers. f. Copies of sale vouchers. Copies of the above papers are made available on Paper Book Page No. 15-102.

It is submitted that during the year under consideration, the trading account discloses total sales of Rs. 15,37,37,800/-. On this, gross profit has been disclosed of Rs. 10,06,241/-, giving GP rate of 6.5%. The N.P disclosed by the assessee is loss of Rs. 1091/-. However, while passing the assessment order, the learned Assessing Officer noticed that there were total credits in the bank account of Rs. 16,72,91,900/-, which also included cash deposited of Rs. 54,35,000/-. The learned Assessing Officer excluded the cash deposits and on the remaining credits in the bank account amounting to Rs. 16,18,56,900/- (Rs. 16,72,91,900 – 54,35,000), applied NP rate of 8% and worked out profit at Rs. 1,29,48,552/- and added the same to the income of the assessee. Further, the learned Assessing Officer also added the cash deposits of Rs. S.S. Diam Pvt. Ltd., Jaipur. 54,35,000/- to the income of the assessee u/ss 69A, being unexplained. The action of the learned assessing Officer is assailed as under, being unlawful, unjust and illegal :-

(a) The deposits in cash during demonetization period are fully explained.

The learned Assessing Officer has wrongly treated the cash deposits of Rs. 54,35,000/- in bank account as unexplained. It is submitted that while depositing cash in the bank, the assessee was required to furnish a statement before the Income Tax Department, disclosing the source of cash. Such a statement in the case of the assessee was also furnished and the same was found in order. There was no objection from the department. A copy of the statement is available on Paper Book Page No. cited supra. It is submitted that this statement contains names of thirty persons to whom sales were conducted in cash amounting to Rs. 54,35,000/-. The statement contains full address of these persons, to whom sales were conducted in cash. The sales effected in cash to these persons are further verifiable from the copy of cash book available on Paper Book cited supra. These cash sales stand accounted for from 1.11.2016 to 16.11.2016. It is out of these cash sales that cash was deposited in the bank account.

No basis for application of NP rate of 8% It is further submitted that these sales have been effected against available stock. The purchases are fully vouched. The major purchases are from the following parties :- S.No. Name of the party Amount of purchase (Rs.) 1. J.K. Jewellers 21301126 2. Sandesh Enterprises 49012800 3. Pabuwal Jewellers 35332500 4. Ranjeet Kumar Mohanlal 6050880 5. Bani Thani 27480000 The above amount of purchases include VAT also. The assessee has accounted for purchases at Rs. 14,69,07,974/- in the trading account, which does not include VAT amount. Thus, the entire purchases are from the aforesaid eight parties. The purchases tally with the purchases recorded in purchase register, wherein the purchases have been shown at Rs. 14,81,69,760/-. It is the submission of the assessee that the purchases, being fully vouched, deserve to be accepted. Further, copies of ledger account of the aforesaid parties also disclose the aforesaid amount of purchases. The entire payment has also been made to these parties through banking channels. No amount against these purchases is outstanding to be paid. Thus, it is established beyond doubt that purchases are from registered dealers, purchases are fully vouched and payment has been made through banking channels. It is against these purchases that sales have been conducted. Vouchers of sales are also available on paper Book page cited supra. In the facts and circumstances of the case and purchases and sales are fully vouched and stock register has been maintained there is no case for disturbing the trading results. The learned Assessing Officer was most unjustified in applying NP rate of 8% and the learned CIT (A) further erred in sustaining the same. The learned Assessing Officer has not given any basis for applying NP rate of 8%, perhaps while applying the NP rate of 8%, the learned Assessing Officer had in his mind the provisions of Sec. 44AD, but it is a case where books of accounts have been maintained and as such, these provisions are not applicable directly or indirectly. In the aforesaid facts, the trading results deserve to be accepted as disclosed. In view of the aforesaid discussion, the additions made by the learned Assessing Officer on account of deposits in Benefit of telescoping Over and above the main submission, as discussed above, the assessee further takes an alternative plea that it is a case where the benefit of telescoping was required to be given by the learned Assessing Officer. The trading additions made of Rs. 1,29,48,552/- cover the amount of Rs. 54,35,000/-, as such, the learned Assessing Officer had no occasion to make separate addition of Rs. 54,35,000/-. The following case laws are quoted in support :-

Provisions of Sec. 69A are not applicable. It is further submitted that the learned Assessing Officer erred in applying provisions of Sec. 69A in making the addition against deposits in bank. The provisions of section 69A are quoted below :- Unexplained money, etc. 69A. Where in any financial year the assessee is found to be the owner of any money, bullion, jewellery or other valuable article and such money, bullion, jewellery or valuable article is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the money, bullion, jewellery or other valuable article, or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the money and the value of the bullion, jewellery or other valuable article may be deemed to be the income of the assessee for such financial year.

The perusal of the aforesaid provisions reveal that it is attracted and applicable only in case assessee is found to be the owner of any money, bullion, jewellery or other S.S. Diam Pvt. Ltd., Jaipur. valuable article. In the case of the assessee, the learned Assessing Officer has applied this section on the entries in the bank account of cash deposits. At the stage of time, there was no money pertaining to these entries in the bank. Therefore, the assessee cannot be said to be found to be owner of money. The assessee was not found with money. There were no money in the bank account of which the assessee could be said to be owner. In view of this, it is the submission of the assessee that provisions of Sec. 69A have been wrongly applied. Therefore, addition made u/s 69A is unlawful, wrong and deserves to be deleted. The following case laws are quoted in support :-

(1) DURGA KAMAL RICE MILLS vs. COMMISSIONER OF INCOME TAX HIGH COURT OF CALCUTTA (2003) 183 CTR 0223, (2004) 265 ITR 0025, (2003) 130 TAXMAN 0553.

Section 69A deals with unexplained moneys of which the assessee is found to be the owner. The material difference between section 68 and 69A is that section 68 does not require that the amount is to be owned by the assessee. It only deals with any amount shown in the books of account of the assessee where section 69A deals with money etc. owned by the assessee and found in his possession. Therefore, ownership is one of the consideration when the matter comes under section 69A.

(2) COMMISSIONER OF INCOME TAX vs. K.T.M.S. MAHAMOOD HIGH COURT OF MADRAS (1997) 140 CTR 0282, (1997) 228 ITR 0113, (1997) 92 TAXMAN 0169.

In order to make the assessment under s. 69A for undisclosed income, the assessee must not only be a person, who is in possession of the undisclosed income, but he should also be the owner of the same.

S.S. Diam Pvt. Ltd., Jaipur. (3) ASSISTANT COMMISSIONER OF INCOME TAX vs. JOTINDRA STEEL & TUBES LTD. IN THE ITAT DELHI BENCH ‘C’ (2022) 64 CCH 0042 Del Trib. (2022) 94 ITR (Trib) 0359 (Delhi)

Held that since no real money was found to be in possession and there was no mention of any name in seized document, impugned addition were merely based on presumption and was tobe deleted.

Regular Ground No. 3.

Under the facts and circumstances of the case, the learned CIT (A) has erred in confirming the action of the learned Assessing Officer in applying of provisions of Section 115BBE of the Income Tax Act, 1961, which are not applicable in assessee’s case.

As discussed above, the provisions of Sec. 69A were not applicable in the case of the assessee and, therefore, the learned Assessing Officer erred in applying provisions of Sec. 115BBE in the case of the assessee. It is, therefore, requested to grant consequential relief accordingly.

Ground No. 4. The assessee craves your indulgence to add, amend or alter all or any grounds of appeal before or at the time of hearing.

The Hon’ble Tribunal is requested to consider additional grounds taken, additional evidences submitted, the submissions and case laws cited by the assessee and decide the appeal in favour of the assessee by quashing the assessment order/deleting the additions made by the learned Assessing Officer and sustained by the learned CIT (A).”

S.S. Diam Pvt. Ltd., Jaipur. 8. On the other hand, the ld. DR vide his letter dated 28.03.2025 submitted the report of the AO/ground-wise comments which are being reproduced hereunder : “ Comment on the grounds in the case of M/s. S.S. Diam Pvt. Ltd. for A.Y. 2017-18.

Additional Ground No. 1 : On the facts and in the facts and the circumstances of the case and in law the learned Assessing has erred in making assessment in the hands of company whereas the same was not in existence as on 31.03.2017, being struck off by R.O.C.

Comments : The Ground taken by the assessee is not acceptable as the company had to file its return before due date of filing of the return for A.Y. 2017-18. The case of the assessee company relate to FY 20016-17 (from 01.04.2016 to 31.03.2017) and during that period one director i.e. Smt. Bhagwati Devi was not disqualified because the period for disqualification as per order is from 01.11.2017 to 31.10.2022. That means after end of the financial year, the assessee had approx 07 months to file the return and get it accounts audited.

Additional Ground No. 2: On the facts and in the facts and the circumstances of the case and in law the learned Assessing has erred in making assessment in the hands of company despite being made aware that company stood struck off as on 31.03.2017 by the ROC.

Comments :The Ground taken by the assessee is not acceptable on merits because the assessee itself pleading that the directors of the assessee company were disqualified for the period 01.11.2016 to 31.10.2022 (Shri Nitesh Agarwal) and 01.11.2017 to 31.10.2022 (Smt. Bhagwati Devi), therefore it was not possible for them to sign any documents on behalf of company to verify return of company including matter related to Income-tax but the other side the appeal before the ld. CIT (A) was filed on 27.01.2020 which falls under the period of disqualification of directors as claimed by the assessee.

Additional Ground No. 3 : On the facts and in the facts and the circumstances of the case and in law the learned Assessing has erred in not giving the benefit of the telescoping of trading addition of Rs. 1,29,48,522/- vis-à-vis addition on account of bank deposits of Rs. 54,35,000/-.

S.S. Diam Pvt. Ltd., Jaipur. Comments : In this regard, it is submitted that the case of assessee company pertained to financial year where in demonetization period involved. During the demonetization period, the assessee made cash deposit of Rs. 54,35,000/- in Union Bank of India and in respect of show cause issued to it, no response was furnished by the assessee. Therefore, an amount of Rs. 54,35,000/- was added u/s 69A of the Act because such amount remained unexplained money in absence of any reply from the awssesse3e. Further, huge amount of credit entries were reflecting in its account maintained with Union Bank of India i.e. Rs. 16,72,91,900/-. For the natural justice, the AO calculated the net profit by applying the N.P. Ratio @ 8% on the total credit entries of Rs. 16,18,56,900/- (Total credit of Rs. 16,72,91,900 – Cash deposit during demonetization period of Rs. 54,35,000/-). Therefore, the action of AO was correct.

Additional Ground No. 4 : On the facts and in the facts and the circumstances of the case and in law the learned Assessing has erred in making addition on account of G.P. rate of Rs. 1,29,48,522/- and again on application of such income in deposits in bank of Rs. 54,35,000/-.

Comments : In this regard, it is submitted that in the case of assessee company, the specific information has been available on AIMS Module regarding cash deposited in bank of Rs. 54,35,000/- in account No. 427501010036846 maintained with Union Bank of India during the demonetization period from 09.11.2016 to 30.12.2016. On perusal of the bank statement, it was observed the AO, the assessee is engaged in business activity during the year under consideration and there were total credit entries of Rs. 16,72,91,900/- including cash deposits of Rs. 54,35,000/- during the demonetization period. Therefore, looking to facts of the case and information available on record as well as in view of natural justice, provision of section 44AD was applied in the case of the assessee and net profit was calculated @ 8% on total credits of Rs. 16,18,56,900/- treated the same its turnover for the year under consideration and addition of Rs. 1,29,48,522/- was made accordingly. “

S.S. Diam Pvt. Ltd., Jaipur. Additional Ground No. 1 : On the facts and in the facts and circumstances of the case and in law, the learned Assessing Officer has erred in making assessment in the hands of the company whereas the same was not in existence as on 31/3/2017, being struck off by R.O.C. And Additional Ground No.

2. On the facts and in the facts and circumstances of the case and in law, the learned Assessing Officer has erred in making assessment in the hands of the company despite being made aware that company stood struck off as on 31/3/2017 by the R.O.C.