SUPERIOR AGRO CROPS PVT. LTD.,DELHI vs. ACIT, CC-6, NEW DELHI
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Income Tax Appellate Tribunal, DELHI BENCH ‘H’: NEW DELHI
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘H’: NEW DELHI BEFORE, SHRI DR. B.R.R. KUMAR, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER ITA No.1613/Del/2021 (ASSESSMENT YEAR 2017-18)
M/s. Superior Agro Crops ACIT, P. Ltd. Central Circle-6, Vs. CIT(A)-(A) XXIV, Radheshyam Sharma & Co. New Delhi Chartered Accountants, 351, 3rd Floor, Aggarwal Modern Bazar, Lawrence Road, Ind. Area, Delhi PAN : AAECS6686F (Appellant) (Respondent)
Appellant by Sh. Nitin Gulati, Adv. Respondent by Sh. Amit Katoch, Sr. DR Date of Hearing 14/02/2024 Date of Pronouncement 27/02/2024
ORDER PER YOGESH KUMAR U.S., JM: This appeal by Assessee is filed against the order of Learned
Commissioner of Income Tax (Appeals)-24, New Delhi [“Ld. CIT(A)”,
for short], dated 28/08/2021 for Assessment Year 2017-18.
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ITA No.1613/Del/2021 Superior Agrocrops Pvt. Ltd. 2. The Grounds taken in this appeal is as under:
“1. That having regards to the facts and circumstances of the case, Ld. CIT-(A) has grossly erred in law and on facts in confirming the additions of Rs. 20,00,000 /- on account of cash deposited during the de monetization during the year by recording incorrect facts and making irrelevant observations. Therefore, the additions made as such may be liable to be deleted.
That having regards to the facts and circumstances of the case, Ld. CIT-(A) has grossly erred in law and on facts in confirming the denial of the (i) documents placed on record, not considering past history of the appellant and confirming the addition on account of cash sales without denying sales and rejecting books of account by the Ld. AO and confirming additions of Rs. 20,00,000/- by recording incorrect facts and making irrelevant observations. Therefore, the additions made as such may be liable to be deleted.
That having regards to the facts and circumstances of the case, Ld. CIT(A) has grossly erred in law and on facts, in partially confirming the order framed by the Ld. AO u/s 143(3) in spite of the fact that the Ld. AO passed orders without considering the fact that cash sales( and/or payment to farmers/consigners ) is a regular part of the business of the appellant. Therefore, the assessment completed as such may be held ab-initio invalid.
That having regards to the facts and circumstances of the case, Ld. CIT-(A) has grossly erred in law and on facts, in partially confirming the order framed by the Ld. AO u/s. 143(3) and that too without considering the material on record; therefore, the additions made as such per Ground of Appeals No. 2 may be liable to be deleted. 5. That having regards to the facts and circumstances of the case, Ld. CIT-(A) has grossly erred in law and on
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ITA No.1613/Del/2021 Superior Agrocrops Pvt. Ltd. facts, in partially confirming the order framed by the Ld. AO u/s. 143(3) and that too without giving an adequate opportunity of being heard, therefore, the additions made as such as per Grounds of Appeals No. 2 may be liable to be deleted.
That having regards to the facts and circumstances of the case, Ld. CIT-(A) has grossly erred in law and on facts, in partially confirming the order framed by the Ld. AO u/s 143(3) and that too without considering the fact that the partial relief is given by the Ld. CIT ( A) on the same grounds and judgment made by the Ld. CIT on amount of relief is having no base; therefore, the additions made as such as per Grounds of Appeals No. 2 may be liable to be deleted.
That having regards to the facts and circumstances of the case, Ld. CIT-(A) has grossly erred in law and on facts, in partially confirming the action of the Ld. AO in spite of the fact that the Ld. AO has simply made the addition only on the basis mala fide intention and without rejecting sales and books of accounts.
That having regards to the facts and circumstances of the case, Ld. CIT-(A) has grossly erred in law and on facts, in confirming the action of the Ld. AO despite the fact that on the facts and circumstances of the case and in law, the addition made by the Ld. AO is arbitrary and against the principles of natural justice and therefore, the addition made is liable to be deleted. 9. That the appellant, crave leave to amend, alter, add or delete any of the forgoing Ground of Appeal.”
Brief facts of the case are that, the return was filed u/s 139(5)
declaring income at Rs. 15,85,22,200/- and the case of the
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ITA No.1613/Del/2021 Superior Agrocrops Pvt. Ltd. assessee was selected for complete scrutiny through CASS. An
assessment order came to be passed u/s 143(3) of the Act by
making addition of Rs. 65,56,235/- u/s 68 of the Act vide
Assessment Order dated 31/12/2019. As against the Assessment
Order dated 31/12/2019, the assessee preferred an Appeal before
the CIT(A), the Ld. CIT(A) vide order dated 28/08/2021 sustained
the addition of Rs. 20,00,000/- out of the total addition of Rs.
65,56,235/- made u/s 68 of the Act. Aggrieved by the order dated
28/08/2021 passed by the Ld. CIT(A), the assessee preferred the
present Appeal on the grounds mentioned above.
The Ld. Counsel for the assessee vehemently submitted that
the authorities below have not considered the past history of the
assessee, not considered the document produced by the Assessee
and the addition has been made which has been confirmed by the
CIT(A) without disrupting the sales and without rejecting the books
of accounts of the assessee and the authorities have not considered
the material available on record.
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ITA No.1613/Del/2021 Superior Agrocrops Pvt. Ltd. 5. Per contra, the Ld. Departmental Representative relying on the
orders of the Ld. CIT(A) submitted that the Ld. CIT(A) has rightly
sustained the partial addition out of the total addition made by the
A.O., which is reasonable, therefore, sought for dismissal of the
Appeal filed by the assessee.
We have heard both the parties and perused the material
available on record. The Ld. A.O. while making the addition held
that ‘in-spite of showing huge cash deposits during the year under
consideration, the assessee has not offered any valid explanation,
the assessee has not explained the source and nature of the cash
deposit made during the period of demonetization’. Thus, the A.O.
made addition of the said cash deposit of Rs. 65,56,235/- on
account of unexplained cash receipt of the assessee. The ld. CIT(A)
while sustaining the addition of Rs. 20,00,000/- held as under:-
“4.3.17 From analysis of above details furnished by was not justified in the appellant, it is held due the Assessing Officer adding back entire cash deposited of Rs. 65,56,235/- Considering past trends of the appellant as well as the fact that the appellant was maintaining books of account which were duly audited and not rejected by the Assessing Officer, part of the cash deposited during appears to be explained. The total cash deposits of the
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ITA No.1613/Del/2021 Superior Agrocrops Pvt. Ltd. appellant upto December 2016 of 65.97.340/- are much lower than cash deposits upto December 2015 of Rs. 1,01,24,740-We turnover of the appellant has increased substantially compared to FY 2015-16, cash sales have declined substantially. From perusal of above monthly sales for FY 2016-17, it is held that cash sales and cash deposits upto 31.07.2016 stand explained on the basis of past trends and cash balance was only Rs. 4,98,536 as on 31.07.2016. However, in August 2016, September 2016 and October 2016, the closing cash balance increased substantially to Rs. 28.97 Lakhs, Rs. 38.07 Lakhs and Rs. 64.05 Lakhs respectively. Considering past trends of the appellant of regularly depositing cash received in the bank account, unlike in October 2016, it is held that cash sales of Rs. 20,00,000 are unexplained and addition of Rs. 20,00,000 u/s 68 r.w.s 115BBE of Income Tax Act is hereby confirmed. In view of above facts as well as past trends of the appellant, it is held that balance cash deposited during demonetization period of Rs. 45,56,235 stands explained. Hence, Ground Nos. 3, 4, 5, 6,7,8 & 9 of the appeal are partly allowed.”
The Ld. CIT(A) while deciding the issue has specifically
observed that the assessee was maintaining books of account which
were duly audited and the said books of accounts were not rejected
by the A.O. and further observed that the cash deposits of the
assessee up to December, 2016 is Rs. 65,97, 340/- are much lower
than the cash deposits up to December 2015 i.e. 1,01,24,740/-.
The audited books of accounts of the assessee has not been rejected
and the sales of the assessee has not been disturbed, then the
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ITA No.1613/Del/2021 Superior Agrocrops Pvt. Ltd. Revenue Authorities are precluded from making any addition. Even
after observing that the cash deposits of the Assessee was much
lower than the previous year, the Ld. CIT(A) has not given any valid
reason to sustain the addition of Rs. 20,00,000/-, thus, in our
considered view, the order passed by the Ld. CIT(A) is erroneous.
Accordingly, the addition sustained by the Ld. CIT(A) is hereby
deleted.
In the result, the Appeal filed by the assessee is allowed.
Order pronounced in open Court on 27th February, 2024
Sd/- Sd/- (DR. B.R.R.KUMAR) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 27/02/2024 B.R./R.N Sr. Ps. Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT
ASSISTANT REGISTRAR ITAT, NEW DELHI
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ITA No.1613/Del/2021 Superior Agrocrops Pvt. Ltd.
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