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Facts
The assessee, running a petrol pump, filed an ITR showing income. The case was selected for scrutiny due to large cash deposits during demonetization. The Assessing Officer (AO) made additions under sections 69A and 68 for cash deposits and unsecured loans, respectively. The CIT(A) upheld these additions.
Held
The Tribunal held that the assessee had provided sufficient evidence regarding the source of cash deposits as business sales, which were duly recorded in the books of account. It also noted that the AO had not rejected the books of account. For unsecured loans, the assessee provided confirmations, and the onus shifted to the AO to prove otherwise, which was not done.
Key Issues
Whether the additions made under section 69A for cash deposits and section 68 for unsecured loans were justified, given the evidence provided by the assessee and the procedural conduct of the lower authorities.
Sections Cited
69A, 68, 143(3), 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JODHPUR BENCH, JODHPUR.
Before: DR. MITHA LAL MEENA & DR. S. SEETHALAKSHMI
ORDER PER: DR. S. SEETHALAKSHMI, J.M. This is an appeal filed by the assessee against the order of learned CIT (A), dated 10.01.2024 passed under section 250 of the Income Tax Act, 1961, for the assessment year 2017-18. The assessee has raised the following grounds of appeal :-
Sita Devi Choudhary, Jalore 1. Incorrect invocation of section 69A and non-consideration of submission/evidence filed by the assessee. 2. Incorrect invocation of section 68 and non-consideration of submission/evidence filed by the assessee.
Succinctly, the facts as culled out from the records are that the appellant is running a petrol pump under the trade name of M/s Mahadev Petroleum. She had filed her ITR showing an income of Rs.8,49,300/- The case of the assessee was selected for scrutiny through CASS on account of large cash deposit during the demonetization period. The Ld.AO completed the assessment u/s 143(3) and assessed the income at Rs.1,92,03,300/- making an addition of Rs.1,73,04,000/- u/s 69A in respect of cash deposited by the assessee in her bank account and a further addition of Rs.10,50,000/- u/s 68 holding the unsecured loans as unexplained.
Aggrieved from the order of Assessing Officer, the assessee preferred an appeal before the CIT(A) challenging the additions made by the AO. The Ld.CIT(A) upheld both the additions made by observing- “5.5 I have perused the matter and I find that the appellant did not provide any satisfactory explanation supported with material evidence in spite of sufficient opportunity being provided at the assessment stage. It is an undisputed fact that the bank accounts stand in the name of the appellant, and that cash and other deposits were made into such accounts. During the course of appellate proceedings, various opportunities were given to the appellant to furnish the relevant documents/evidence in support of his claim but appellant has failed to furnish any documentary evidence in support of its claim/to explain the huge deposits of cash. The appellant’s claim that the cash sales Sita Devi Choudhary, Jalore were from sale of Petroleum products has not been supported by details of cash sales, day book, stocks received and sold day wise etc. In the absence of the above, it is not possible to match the sales with the cash deposited in the bank account of the appellant. 5.8 Keeping in view the above, and in view of the fact that the AO in his order has explained the reasons for addition made in this case whereas the appellant has not furnished any documentary evidences/details in support of his case, the addition made by the Assessing Officer is hereby confirmed and ground of appeal raised by the appellant is dismissed.”
4. Now the assessee is in appeal before us. It is a contention of the assessee that the Ld.AO failed to consider the explanation filed and the evidence furnished to him.
The assessee, in support of the grounds of appeal
, made the following written submission: - (1) That the assessee had made a deposition of Rs 1,73,04,000/- during the period of demonetization. (2) That as the business of assessee is selling of petroleum and diesel, therefore the sale of assessee is largely cash sale. (3) That the assessee had duly accounted for the cash sale in its books of accounts and considered the said sale in its trading account to identify proper tax liability as per norms prevailing during the assessment year 2017-18 and had duly discharged its tax liability. (4) That assessee had received assessment order u/s 143(3) vide Order No ITBA/AST/S/143(3)/2019-20/1022853643(1) dated 21/12/2019 wherein the assessing authority had made addition in the total income of assessee on two grounds viz (i) addition under section 69A and (ii) addition under section 68. (5) That the assessee had made available all the relevant documents as required by the assessing authority while replying to the adjudication proceedings under section 143(3) of the Income Tax Act 1961 and the same had been duly acknowledged by the assessing authority while passing order u/s 143(3) s under – (6) That it is further for your kind notice that the assessee had also furnished stock register as That it is further for your kind notice that the assessee had also furnished stock register as That it is further for your kind notice that the assessee had also furnished stock register as under – (7) That the assessee had also submitted purchase details That the assessee had also submitted purchase details and VAT returns as under and VAT returns as under – (8) That however while passing the order the assessing authority had not considered the That however while passing the order the assessing authority had not considered the That however while passing the order the assessing authority had not considered the submissions made by assessee and did not consider such submissions made by assessee submissions made by assessee and did not consider such submissions made by assessee submissions made by assessee and did not consider such submissions made by assessee as under – (9) That in view of the above submissions the That in view of the above submissions the assessing officer had erred in passing order assessing officer had erred in passing order and passed the impugned order u/s 143(3) without considering the submission made by and passed the impugned order u/s 143(3) without considering the submission made by and passed the impugned order u/s 143(3) without considering the submission made by the assessee. (10) That the addition made in the total income u/s 69A is due to remark of non That the addition made in the total income u/s 69A is due to remark of non- That the addition made in the total income u/s 69A is due to remark of non submission of sales and purchase regis submission of sales and purchase registers, stock details and VAT returns as under ters, stock details and VAT returns as under – (11) That in view of the facts enumerated above the additions made in total income of That in view of the facts enumerated above the additions made in total income of That in view of the facts enumerated above the additions made in total income of assessee under section 69A is patently incorrect and liable to be set aside. assessee under section 69A is patently incorrect and liable to be set aside. assessee under section 69A is patently incorrect and liable to be set aside. (12) That it is further for your kind consideration th That it is further for your kind consideration that the provisions of section 69A of at the provisions of section 69A of Income Tax Act 1961 are not applicable in this situation of assessee. Income Tax Act 1961 are not applicable in this situation of assessee. (13) That the provisions reads as under That the provisions reads as under – (14) That the provision can be understood if all the following situations are satisfied That the provision can be understood if all the following situations are satisfied – That the provision can be understood if all the following situations are satisfied (i) The assessee is found to b The assessee is found to be the owner (ii) Of any money, bullion, jewellery or other valuable article Of any money, bullion, jewellery or other valuable article (iii) And such is not recorded in the books of accounts, if any And such is not recorded in the books of accounts, if any (iv) Maintained by him for any source of income Maintained by him for any source of income (v) And assessee offers no explanation about the nature or source And assessee offers no explanation about the nature or source (vi) Or explanation offered Or explanation offered is not satisfactory (vii) Such…… may be deemed to be the income of the assessee… Such…… may be deemed to be the income of the assessee… Sita Devi Choudhary, Jalore (15) That the above provision is not applicable to the assessee for the assessment year 2017-18 due to the following reasons as under – Sr No Provision Remarks The assessee is found to be the That in the present case the assessee is owner the owner of Rs 1,73,04,000/- and the cash is deposited by him. Such cash collection is from the sales made by it on different dates as per sales 1 vouchers and the stock registers maintained by it. It is further for your kind consideration that the assessee is “owner of cash” and not “found to be owner of cash”. Of any money, bullion, jewellery The nature of money in this case is 2 or other valuable article ‘cash’. And such is not recorded in the The amount of Rs 1,73,04,000/- is books of accounts, if any duly recorded in books of accounts. The details of the same was duly submitted at the time of adjudication itself. The said amount is duly 3 received against the sale of petrol and diesel, thereafter it was duly deposited in the bank account and duly recorded in books of accounts and offered as sale for tax under Income Tax Act 1961 at the time of filing of ITR. Maintained by him for any source Assessee had made proper explanation of income and submitted all the relevant records. Further none of the submissions made by assessee was rejected by the assessing authority at any stage 4 of proceedings. Furthermore, books of accounts maintained by assessee were never questioned and rejected by the adjudicating authority. And assessee offers no Assessee was able to explain the 5 explanation about the nature or nature and source of cash receipts. source Sita Devi Choudhary, Jalore Sita Devi Choudhary, Jalore Or explanation offered is not Or explanation offered is not The The explanation explanation offered offered and and satisfactory documents documents submitted submitted were were not not considered sidered by by the the adjudicating adjudicating authority and without stating the authority and without stating the 6 reasons of non-acceptance acceptance of of documents submitted by assessee the documents submitted by assessee the addition was made in the total income addition was made in the total income of assessee. Such…… may be deemed to be Such…… may be deemed to be The cash deposition was already The cash deposition the income of the assessee the income of the assessee offered for tax as offered for tax as “sales” and “sales” and 7 applicable tax was already paid on the applicable tax was already paid on the same and therefore it could not again same and therefore it could not again be deemed to be income of assessee. be deemed to be income of assessee.
(16) That in view of the above provisions of section 69A could not be invoked in this That in view of the above provisions of section 69A could not be invoked in this That in view of the above provisions of section 69A could not be invoked in this case and therefore the entire proceedings are liable to be set aside. e the entire proceedings are liable to be set aside. (17) That another addition to total income is made under section 68 of the Income Tax That another addition to total income is made under section 68 of the Income Tax That another addition to total income is made under section 68 of the Income Tax Act 1961 on the sole ground that identity and creditworthiness of the aforesaid persons Act 1961 on the sole ground that identity and creditworthiness of the aforesaid persons Act 1961 on the sole ground that identity and creditworthiness of the aforesaid persons was not verifiable as under was not verifiable as under – (18) That your kind attention is invited to the fact that during adjudication proceedings at your kind attention is invited to the fact that during adjudication proceedings at your kind attention is invited to the fact that during adjudication proceedings itself the assessee had made available required documents to the assessing officer as itself the assessee had made available required documents to the assessing officer as itself the assessee had made available required documents to the assessing officer as under – Sita Devi Choudhary, Jalore Sita Devi Choudhary, Jalore (19) That further the details of PAN and address is also mentioned at point 31(a) That further the details of PAN and address is also mentioned at point 31(a) of the That further the details of PAN and address is also mentioned at point 31(a) Tax Tax Tax Audit Audit Audit Report Report Report for for for the the the Assessment Assessment Assessment Year Year Year 2017 2017-18 2017 (20) That in view of the above submissions the provisions of section 68 are invoked That in view of the above submissions the provisions of section 68 are invoked That in view of the above submissions the provisions of section 68 are invoked incorrectly and therefore entireproceedings are liable to be set aside. incorrectly and therefore entireproceedings are liable to be set aside.
(21) That thereafter appeal was filed by assessee That thereafter appeal was filed by assessee vide Acknowledgment number vide Acknowledgment number 288916651080120 dated 08/01/2020 and during proceedings assessee had submitted all 288916651080120 dated 08/01/2020 and during proceedings assessee had submitted all 288916651080120 dated 08/01/2020 and during proceedings assessee had submitted all the required documents as under the required documents as under – Sita Devi Choudhary, Jalore Sita Devi Choudhary, Jalore (22) That further the time limit give for submission of reply was 12 That further the time limit give for submission of reply was 12-01 01-2024 as evident from the details submitted from the details submitted as under – (23) That it is further for your kind consideration that the submission made by assessee That it is further for your kind consideration that the submission made by assessee That it is further for your kind consideration that the submission made by assessee was partial submission. (24) That the order under section 250 was passed on 10/01/2024 as under That the order under section 250 was passed on 10/01/2024 as under – That the order under section 250 was passed on 10/01/2024 as under (25) That from the above details it is evident that the order was pa That from the above details it is evident that the order was passed on 10/01/2024 ssed on 10/01/2024 whereas the time limit given for submission of documents is 12/01/2024. Therefore, such whereas the time limit given for submission of documents is 12/01/2024. Therefore, such whereas the time limit given for submission of documents is 12/01/2024. Therefore, such an action of the Commissioner Appeals was beyond the principles of natural justice and an action of the Commissioner Appeals was beyond the principles of natural justice and an action of the Commissioner Appeals was beyond the principles of natural justice and liable to be set aside. (26) That it is further for your kind atten That it is further for your kind attention that the Commissioner Appeals had tion that the Commissioner Appeals had passed a cryptic order affirming the findings of assessing authority without considering passed a cryptic order affirming the findings of assessing authority without considering passed a cryptic order affirming the findings of assessing authority without considering the submissions made by the assessee and made and addition under section 69A as under the submissions made by the assessee and made and addition under section 69A as under the submissions made by the assessee and made and addition under section 69A as under – (27) That it is further for your kind atten That it is further for your kind attention that the Commissioner Appeals had tion that the Commissioner Appeals had further passed a cryptic order affirming the findings of assessing authority without further passed a cryptic order affirming the findings of assessing authority without further passed a cryptic order affirming the findings of assessing authority without considering the submissions made by the assessee and made and addition under section considering the submissions made by the assessee and made and addition under section considering the submissions made by the assessee and made and addition under section 68 as under – (28) That another fact is that the H That another fact is that the Hon’ble Commissioner Appeal while passing order on’ble Commissioner Appeal while passing order had duly acknowledged that copies of confirmation of accounts was duly furnished but had duly acknowledged that copies of confirmation of accounts was duly furnished but had duly acknowledged that copies of confirmation of accounts was duly furnished but did not explain the reason of non did not explain the reason of non-acceptance of the same. The relevant portion is attached acceptance of the same. The relevant portion is attached herewith – (29) That in view of all That in view of all the facts mentioned above it is evident that the entire the facts mentioned above it is evident that the entire proceedings had been conducted without considering the submissions made by assessee proceedings had been conducted without considering the submissions made by assessee proceedings had been conducted without considering the submissions made by assessee and without following proper process thout following proper process of law in force.
Without prejudice to above kindly consider the following Without prejudice to above kindly consider the following humble submissions humble submissions (30) Sales are duly recorded in books of account Sales are duly recorded in books of account (i) That it is further for your kind consideration that the sales for the period of That it is further for your kind consideration that the sales for the period of That it is further for your kind consideration that the sales for the period of demonetisationwas duly accounted for in the books of account. demonetisationwas duly accounted for in the books of account. demonetisationwas duly accounted for in the books of account. (ii) That the monthly details of sales recorded in books That the monthly details of sales recorded in books of accounts is as under of accounts is as under – Month HSD (Diesel) HSD (Diesel) MS (Petrol) Oil Total Sales Total Sales 47,78,344 47,78,344 14,89,452 0 62,67,796 62,67,796 April May 87,20,072 87,20,072 15,97,100 0 1,03,17,172 1,03,17,172 June 97,91,998 97,91,998 13,20,701 0 1,11,12,699 1,11,12,699 July 57,44,834 57,44,834 13,31,471 0 70,76,305 70,76,305 August 57,35,462 57,35,462 15,03,544 0 72,39,006 72,39,006 September 43,78,448 43,78,448 13,40,844 42,770 57,62,062 57,62,062 October 1,82,88,725 1,82,88,725 14,84,880 1,83,500 1,99,57,105 1,99,57,105 November 1,27,32,170 1,27,32,170 16,91,957 28,450 1,44,52,577 1,44,52,577 70,01,144 70,01,144 12,73,241 0 82,74,385 82,74,385 December January 41,00,579 41,00,579 21,00,199 0 62,00,778 62,00,778 12 (iii) That you will appreciate that there is no abnormal increase in sales of assessee during demonetisation period from November to December 2016. (iv) That you will further appreciate that the highest value of sales took place in October 2016. (iv) That for the above facts it is evident that the assessee is a bonafideassessee and it had duly recorded all sales in its books of accounts. (31) Sales can further be verified with the sales invoices for the period. (i) The details of invoices during the said period from 8.11.2016 to 30.12.2026 (period of demonetisation) is as under – Quantity Quantity Sales Sales Invoice Date Total Sales Diesel Petrol Diesel petrol Numbers (ltr) (ltr) 8-11- 4177- 2,91,943 38,338 3,30,281 4,754 538 16 4188 9-11- 4189- 18,78,286 89,645 19,67,931 30,586 1,258 16 4206 10- 4207- 11- 18,14,236 1,45,299 19,59,535 29,543 2,039 4254 16 11- 4255- 11- 1,64,210 1,42,734 3,06,944 2,674 2,003 4272 16 12- 4273- 11- 6,38,725 58,006 6,96,731 10,401 814 4284 16 13- 4285- 11- 8,37,203 64,990 9,13,451 13,633 912 4302 16 14- 4303- 11- 6,00,160 76,248 6,65,150 9,773 1,070 4332 16 15- 4333- 11- 4,44,363 54,443 4,98,806 7,236 764 4356 16 16- 4357- 2,24,181 41,323 2,65,504 3,765 595 11- 4368 Sita Devi Choudhary, Jalore 16 17- 4369- 11- 2,60,202 50,074 3,10,276 4,368 721 4380 16 18- 4381- 11- 8,11,999 43,615 8,55,614 13,631 628 4398 16 19- 4399- 11- 2,44,773 43,892 2,88,665 4,109 632 4410 16 20- 4411- 11- 3,19,295 45,281 3,64,576 5,360 652 4428 16 21- 4429- 11- 2,43,939 52,852 2,96,791 4,095 761 4440 16 22- 4441- 11- 2,60,440 52,574 3,13,014 4,372 757 4452 16 23- 4453- 11- 3,69,632 43,129 4,12,761 6,205 621 4464 16 24- 4465- 11- 6,21,851 1,12,995 7,34,846 10,439 1,627 4482 16 25- 4483- 11- 16,560 24,030 40,590 278 346 4488 16 26- 4489- 11- 1,07,166 28,266 1,35,432 1,799 407 4494 16 27- 4495- 11- 77,143 32,572 1,09,715 1,295 469 4500 16 28- 4501- 11- 67,314 31,322 98,636 1,130 451 4506 16 29- 4507- 11- 45,690 34,308 79,998 767 493 4512 16 Sita Devi Choudhary, Jalore 30- 4513- 11- 59,510 39,864 99,374 999 574 4518 16 01- 4519- 12- 1,82,041 64,869 2,46,910 4,020 930 4536 16 02- 4537- 12- 4,05,144 1,01,068 14,15,512 6,808 1,449 4554 16 03- 4555- 12- 13,390 25,110 38,500 225 360 4560 16 04- 4561- 12- 28,981 31,736 60,717 487 455 4566 16 05- 4567- 12- 24,578 32,713 57,291 413 469 4572 16 06- 4573- 12- 20,948 37,247 58,195 352 534 4578 16 07- 4579- 12- 37,967 34,875 72,842 638 500 4584 16 08- 4585- 12- 6,88,888 33,620 7,22,508 11,576 489 4608 16 09- 4609- 12- 3,26,948 35,991 3,62,939 5,494 516 4626 16 10- 4627- 12- 2,69,164 32,434 3,01,598 4,523 465 4638 16 11- 4639- 12- 3,94,492 36,410 4,30,902 6,229 522 4662 16 12- 4663- 12- 5,11,786 43,594 5,55,380 8,600 625 4686 16 13- 6,32,115 33,201 6,65,316 4687- 10,622 476 Sita Devi Choudhary, Jalore 12- 4716 16 14- 4717- 12- 5,65,047 39,897 6,04,944 9,495 572 4740 16 15- 4741- 12- 4,90,362 56,009 5,46,371 8,240 803 4782 16 16- 4783- 12- 67,722 31,109 98,831 1,138 446 4794 16 17- 4795- 12- 30,233 42,646 72,879 490 587 4800 16 18- 4801- 12- 49,237 37,197 76,434 798 512 4806 16 19- 4807- 12- 3,77,974 39,158 4,17,132 6,126 539 4824 16 20- 4825- 12- 60,898 36,761 97,659 987 506 4830 16 21- 4831- 12- 27,271 37,269 50,540 442 513 4836 16 22- 4837- 12- 46,584 42,355 88,939 755 582 4842 16 23- 4843- 12- 47,818 43,299 76,117 775 596 4846 16 24- 4847- 12- 33,256 37,923 71,179 539 522 4848 16 25- 4849- 12- 53,062 32,910 85,972 860 453 4860 16 26- 4861- 40,969 37,342 78,311 664 514 12- 4866 Sita Devi Choudhary, Jalore 16 27- 4867- 12- 77,063 45,479 1,22,542 1,249 626 4872 16 28- 4873- 12- 7,31,571 36,180 7,67,751 11,630 498 4920 16 29- 4921- 12- 3,47,371 38,360 3,85,731 5,630 528 4944 16 30- 4945- 12- 3,49,962 52,308 4,02,270 5,672 720 4962 16 Total 1,73,31,763 25,74,870 1,99,06,663 2,86,128 36,440
That it is further for your kind consideration that out of total sales as mentioned above the cash sale for the period of demonetisation is Rs 1,62,35,737/- (HS Diesel) and Rs 25,74,870/- (MS Petrol) totaling to Rs 1,88,10,607/-. These details can be verified from the Annexure1 attached herewith. (ii) Verification of sales with stock register 37.1 That the sales as mentioned above can further be verified with the stock register as maintained by the assessee. 37.2 That it is further for your kind consideration that the assessee is required to maintain another stock register as required by the company Essar Oil Limited (now renamed as Nayra Energy Limited) in its prescribed register and the details of the said register is further attached herewith as Annexure 2for your ready reference. (iii) Details of purchases made during the period of demonetisation 38.1 That the details of purchases made from the company during the period of demonetisation are as attached herewith as an Annexure3. 38.2 That the said details can be verified from the invoices attached herewith for your ready reference as Annexure4. 38.3 That further the details of purchases and payment made to the company is also attached herewith for your ready reference as Annexure5. 38.4 That you will further appreciate that the details of payment made to the company is verifiable from the bank statement as attached herewith for your ready reference as Annexure 6. The entry in the bank statement is the summation of amount paid to the company and bank charges charged on the same. (iv) Day to day summary of stock register 39.1 That the details of stock register maintained by the assessee are also attached herewith for your ready reference as Annexure7.
Sita Devi Choudhary, Jalore 39.2 That the details mentioned in the stock register in relation to sales can be verified with the sales details as above. 39.3 That the details of purchases are taken in stock when the same is received by the assessee and therefore the details of invoices commensurate with the stock received by the assessee from the company during the period of demonetisation is attached as Annexure 9 and the same can be verified with the stock register maintained. 39.4 That in view of the above details it is established that the stock register maintained by assessee is true and correct. (v) VAT return furnished for the period 40.1 That the assessee further submits the VAT return for the period under consideration as Annexure 8. That as the details of sales, purchases, day to day stock register and VAT return is duly furnished by the assessee during adjudication, during Commissioner Appeals proceedings and also attached herewith, therefore the deposit of Rs 1,73,04,000/- during the period of demonetisation is arising out of sale proceeds only. (vi) That further as the sales is already offered for tax as per Income Tax provisions therefore there cannot be further addition of the amount of Rs 1,73,04,000/- in the income of the assessee. (vii) That further it is for your kind consideration that the adjudicating authority had not challenged books of accounts of the assessee and hence such an addition in the income of the assessee is bad in law.”
Apart from the written submission, during the personal hearing, the ld.AR of the assessee vehemently argued that the CIT(A) passed the order before the date fixed for compliance, i.e.12.01.2024. The AR also produced screenshot of the submission filed on 03.01.2024, which clearly indicated that the response filed is Partial.The AR stated that as the ITBA portal allows only 10 attachments at a time, the remaining attachments would have been filed later, before the compliance date. But the Ld. CIT(A) was too eager to dispose off the case and without even waiting for the last date of compliance, i.e 12.01.2024, passed the appellate order on 10.01.2024, dismissing the appeal taking the stand that the Sita Devi Choudhary, Jalore appellant’s claim that the cash sales were from sale of Petroleum products has not been supported by details of cash sales, day book, stocks received and sold day wise etc.The AR also referred to two decisions rendered by the Jaipur Bench of the Tribunal in the case of Mahesh Kumar Gupta vs. ACIT [2023] 151 taxmann.com 339 and ACIT vs. Chandan Surana [2023] 149 taxmann.com 379, wherein exactly identical circumstances, the Bench deleted the addition made in respect of cash deposited during demonetisation period.
The ld. DR is heard who relied on the findings of the lower authorities and more particularly advanced similar contentions as stated in the order of the ld. AO.
We have heard the rival contentions and perused the material placed on record, as well as the relevant provisions of law and the case laws cited by the Ld.AR in support of his case. We find that the appellant had adduced sufficient evidence before the AO as well as the CIT(A), which has also been filed before us. The AR had stated that the source of cash deposit was out of cash sales. To substantiate the source of cash deposited in the bank account, he filed the cash book, the sales register, the stock register and the VAT returns. He also emphasized that the Stock register is subject to periodical checks by the Officers of the Oil companies and the DSO from time to time.The AR also pleaded that as the Ld.AO accepted the book results meaning thereby that he did not doubt the Sales, Closing stock or the Purchases of the assessee, in such an eventuality, he could not 19 Sita Devi Choudhary, Jalore have gone to add the cash deposits which resulted from sales made by the assessee. Before the CIT(A), the AR again filed cash book, purchase register and stock register. We find that the Ld.CIT(A) has confirmed the additions and rejected the appeal of the assessee in a mechanical way. His order is cryptic and nonspeaking. Moreover, he has passed the order without even waiting for the reply of the assessee which was due on 12.01.2024. We strongly disapprove the lackadaisical attitude of the CIT(A) towards his work. The bench observes that the AO except stating that during the demonetization period also, the assessee made the cash sales, but, in absence of sales and purchase vouchers, day to day summary of stock of petrol and diesel and VAT return, the sales made by the assessee cannot be verified (which is contrary to the evidence on record),has not found fault with the books of account maintained by the assessee, viz. the cash book, purchases register, sales register, stock register, etc. The AO did not reject the books of accounts of the assessee. All these evidences were provided during appellate proceedings, as well. Regrettably, both the Assessing Officer and the CIT (A) had disregarded these crucial evidences. We may also mention that treating cash deposits from “business income” as “unexplained” can lead to double taxation. We find that the assessee had declared a turnover of ₹10,72,96,154/- with a net profit of 0.82%, and the cash deposits in the assessee’s bank accounts were part of her business receipts, and that treating them as unexplained income resulted in double Sita Devi Choudhary, Jalore taxation. The assessee’s accounts are duly audited and book results have not been disturbed. It is ruled that once the authorities accepted the declared turnover and profit, they could not separately assess the cash deposits as unexplained, more particularly when the bank deposits did not exceed the declared turnover.There is no vacillation to hold that the source of the cash deposited in the bank account has been undisputedly proved.Consequently, there cannot be any addition under Section 69A of the Income Tax Act in respect of cash deposits made by the assessee into her bank account, as unexplained income u/s 69A, in the case of the assessee.Hence, the addition made by the Assessing Officer (AO) is hereby deleted. Ground No.1 of the assessee is allowed.
As regards the unsecured loans taken during the year, we find that the assessee had provided the confirmations from the lenders, as stated by the AO himself in his assessment order. The PAN and addresses were being reflected in the audit report. The copy of the bank accounts of the assessee, reflecting these credits were also filed during assessment proceedings. The copy of ITR and computation of one of the lenders was also filed on two occasions. No enquiry, whatsoever, was made by the AO. In these circumstances, when the assessee duly discharged his onus with respect to the cash credits, the onus shifted to the AO, who did not make any enquiry, whatsoever, to hold the loan as bogus.Therefore, holding the same to be unexplained and making addition u/s 68 is unwarranted.
Sita Devi Choudhary, Jalore The provisions of Section 68 of the Act suggest that if there is any sum credited in books of account maintained for the any previous year, then the assessee is required to offer proper and reasonable explanation regarding nature and sources of such credit to the satisfaction of the AO. Thus, the primary onus lies with the assessee to explain the source of credit in the books. Over the period, the Hon'ble Courts have laid down that the assessee to discharge its onus is required to furnish evidence with respect to identity of the creditor, genuineness of transaction and credit worthiness of the creditor. If the assessee fails to discharge the primary onus cast or the explanation and evidence submitted by the assessee was not found satisfactory by the AO, then the sum credited in the books shall be deemed as income of the assessee.Undeniably, the assessee during the assessment proceedings in support of genuineness of unsecured loans has furnished confirmation and bank statement and in one case, the ITR and computation of the lender. The money was credited in the books of the assessee through the banking channel. However, the AO based on his observation that the assessee failed to furnish the copy of ITR and identity proof of aforesaid persons, held that the unsecured loans remained unexplained and taxed them u/s 68 of the IT Act. The Ld.CIT(A) blindly endorsed the finding of the AO. The approach taken by the revenue is not justified. As the assessee provided necessary details, the onus shifted on the revenue to bring contrary material, but the learned CIT(A) merely Sita Devi Choudhary, Jalore endorsing the AO’s erroneous findings given by him(the AO) ignoring the evidence adduced, drew adverse inference without pointing out any specific defect in the evidence led by the assessee andthe documents submitted by him. Therefore, the finding of the learned CIT(A) is set aside and the AO is directed to delete the addition made by him. Ground No.2 of the assessee is therefore, allowed.
The appeal of the assessee in the result, stands allowed. Order pronounced under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 by placing the details on the notice board.