SUNSHINE INFRATECH (P) LTD.,DELHI vs. DCIT, CENTRAL CIRCLE , NOIDA

O R D E R

PER MANISH AGARWAL, AM:

1. On the facts and circumstances of the case, order passed by the National Faceless Appeal Centre (NFAC) is bad both in the eye of law and on facts.

2. On the facts and circumstances of the case, the order passed by the NFAC is without application of mind.

3. (i) On the facts and circumstances of the case, NFAC has erred, both on facts and in law, in confirming the action of the Ld. Assessing Officer in rejecting the books of account of the assessee. (ii) That the books have been rejected despite the assessee bringing on record all the explanation and evidences to explain the objection raised by the Ld. AO. (iii) That the books have been rejected despite the same having been maintained properly as provided under the law.

4. (i) On the facts and circumstances of the case, the NFAC has erred, both on facts and in law, in confirming the action of the Ld. AO in making addition of Rs.56,95,626/-being the total credits in the bank account of the assessee. (ii) That the NFAC has erred, both on facts and in law, in confirming the above said addition misunderstanding the facts of the case. (iii) That the addition has been confirmed ignoring the fact that all entries on the credit side of the bank account are not representing only the income of the assessee.

5. The applicant craves leave to add, amend or alter any of the grounds of appeal.”

4. The only effective grounds of appeal No.3 & 4 of the assessee wherein the assessee has challenged the action of the AO in invoking the provisions of section 145(3) of the Act and further challenged the addition of Rs.56,95,626/- made on account of credits in the bank /Del/2023 Manoj Kumar Gupta vs. ITO account by holding the same as unexplained credits u/s 68 of the Act.

5. Before us, the Ld. AR of the assessee submitted that Ld. CIT(A) while deciding the appeal of the assessee in Para 6.2 of the order has observed that assessee has made cash deposits of Rs.56,95,626/- in three bank accounts maintained by the assessee. The Ld. AR submitted that observations of the Ld. CIT(A) that the deposits were made in the bank accounts in cash is patently wrong as assessee has made any cash deposits in the bank account and the deposits were made as a result of transfer from the partnership firm M/s Vansh Electrical assessee and from the company wherein he is getting Director remuneration. In support of the claim, the assessee has filed the copies of the bank accounts maintained with Oriental Bank of Commerce, Account No.028222011007001, Oriental Bank of Commerce, Account No. 02822011007001 and Axis Bank Account No.913010052327096 along with respective copies of the bank book as recorded in books of account of the assessee which are placed in the Paper Book pages 38 to 57. The Ld. AR of the assessee submitted that from the perusal of the bank statements as well as bank book, it could be seen that none of the entry of the deposit made by the assessee was in cash and rather they were transfer entry from the firm M/s Vansh Electromechanical Devices (P) Ltd. and from M/s Vansh Electricals. The Ld. AR also submitted the copy of the ledger account of the assessee in the books of M/s Vansh Electricals and also the copy of the Directors remunerations account in the books of Vansh Electromechanical Devices (P) Ltd. to support the claim that /Del/2023 Manoj Kumar Gupta vs. ITO the credit entries are from these two firms. Ld. AR submitted that the AO as well as Ld. CIT(A) has wrongly observed that these deposits were in cash. Ld. AR further submit that the Ld. AO has doubted the cash in hand as 31st March, 2016 declared by the assessee at Rs.26.33 lacs. The assessee was having cash in hand on the opening date of previous year i.e., on 1st April, 2015 at Rs.25,53,172/- carried over from previous year and, therefore, the cash to the extent of opening balance brought forward cannot be doubted. It is further submitted that all the deposits made in the bank account during the year under appeal were through bank channels and as has been demonstrated by the assessee as discussed above and therefore, the action of Ld. AO in rejecting books of accounts is not in accordance with law. Therefore, the Ld. AR of the assessee prayed that books of accounts of the assessee by accepted and additions made be deleted.