LAKSHMI GAYATHRI ARVAPALLI,CHENNAI vs. ACIT,CENTRAL CIRCLE-1(2), CHENNAI

per document found in survey and earlier statement of assessee’s

husband admitting undisclosed income. On appeal, the Ld. CIT(A)

deleted the addition and the Revenue filed an appeal against the

above order. The Tribunal vide consolidated order in ITA NO.2519 to

2523/Chny/2016 dated 04.03.2019 restored the issue to the file of A.O

for examination of details of buyers/customers who have given

advances and whose details were furnished at the time of survey and

as to whether the same is tallied with the actual account of the

assessee and If the assessee is able to show the advances received

to be culminated in sales and the sales have not been recorded in the

books of the assessee, then admittedly no further addition would be

ITA Nos.847 & 848/Chny/2023 :- 5 -:

called for in the hands of the assessee. Following the directions, the

A.O completed the assessment u/s. 143(3) of the Act by adding Rs.

3,28,42,884/- u/s. 68 of the Act concluding that assessee has not been

able to prove that advances received has culminated to sales and out

of cash credit of Rs 4,12,92,884 only Rs 84,50,000 reflected in the

balance sheet. The assessee filed appeal against the above addition

and the Ld. CIT(A) has confirmed the above addition after considering

the detailed submission by assessee and examining the accounts .

Now the assessee is in appeal before us against the above addition.

contended that the A.O had made the addition on the basis of rough

documents found during the course of survey and on the basis of

statement of the husband of the assessee, Shri A.V. Madhava Rao,

which has been subsequently retracted. The Ld. AR has submitted

that against the advances received, sales have been effected and

recorded in the regular books , though there may be variation in the

names found in the rough tally sheet during survey and names

recorded in the audited books of account . The AR submitted that the

Assessing Officer has not doubted the sales which tallies with VAT

ITA Nos.847 & 848/Chny/2023 :- 6 -:

return and the entry in the rough sheet were subsequently posted in

the audited books of accounts and the sale has been effected to the

parties from which advance was actually received.

supporting the orders passed by the lower authorities submitted that

the assessment has been completed on the basis of survey conducted

by department .During the survey it has been found that there are

duplicate set of accounts in respect of cash advance received and Shri

A.V. Madhara Rao, the husband of the assessee who managed the

business has confirmed that these are unaccounted receipts. The Ld.

DR further submitted that the Ld. CIT(A) has examined the explanation

submitted by the assessee that sale has been effected to different

persons from whom the advance was recorded in the rough book and

after examining the account has rejected the explanation. The Ld

CIT(A) has examined the account of M/s. Rajam Industries Pvt. Ltd.,

where there is difference of sundry debtor figure of Rs 2,24,58,328 in

the survey data and audited data and doubted that entries made in

audited books as number of cash entries of Rs 20,000 each day . The

Ld DR submitted that assessee has not been able to submit even

confirmation before Ld CIT(A).

ITA Nos.847 & 848/Chny/2023 :- 7 -:

available on record. The Co-ordinate Bench vide ITA

No.2523/Chny/2016 dated 04.03.2019 in the above case has restored

to the file of AO as per following direction :

“The issue is restored to the file of the A0 for examination of the details of the buyers/ customers who have given the advances and whose details were furnished at the time of survey and as to whether the same is tallied with the actual accounts of the assessee. If the assessee is able to show the advances received to be culminating in sales and the sales having been recorded in the books of the assessee, then admittedly no further addition would be called for in the hands of the assessee. With these directions, the issues in these appeal are restored to the file of the A0 for verification of the same. " "Coming to the issue of the reopening of assessment, which has been raised in the Cross-objections fled by the assessee, as the issue on merits are restored to the file of the AO for re-adjudication, we are not giving any finding on the re-opening of the assessment and consequently the issues are left open and restored to the file of the A0 for re-adjudication.”

survey has made the addition of Rs. 4,12,92,884/-, as unexplained

cash advance received from the customers, but not accounted in the

regular books of accounts. In the set aside assessment, the A.O has

accepted Rs. 84,50,000/- as accounted in the regular books of

accounts and therefore, has made the addition of Rs. 3,28,42,884/-.

The A.O has noted that the assessee did not furnish any details for

ITA Nos.847 & 848/Chny/2023 :- 8 -:

verification as per the direction of ITAT to show that advance received

culminated in sales and the sales have been recorded in the books of

accounts. The Ld CIT(A) has considered the assessee’s claim that

many cash credits appearing in different parties in survey data relates

to cash entries of Rs 20000 or below of M/s. Rajam Industries Pvt.

Ltd in audited books and that in the survey data cash credit entries

have wrongly been made in various parties instead of this party and

rejected the claim as no iota of any evidence was furnished. The

assessee neither before A.O nor before Ld. CIT(A) has been able to

establish that cash advance received from parties as found during

survey , has been cleared by subsequent sales. The Ld CIT(A) has

considered all the issues raised and passed well-reasoned order. In

view of the above, we do not find any infirmity in the order of Ld.

CIT(A) and therefore, order of Ld. CIT(A) is confirmed. The appeal in

ITA No.847/Chny/2023 for A.Y 2007-08 is dismissed accordingly.

Rs.13,12,379/- made u/s. 68 of the Act . Therefore, our adjudication

above for A.Y 2007-08 is mutatis mutandis applies for A.Y 2008-09

ITA Nos.847 & 848/Chny/2023 :- 9 -:

also. Hence, this appeal in ITA No.848/Chny/2023 for A.Y 2008-09 is dismissed.

Order pronounced on 30th September, 2024.

Sd/- Sd/- (एबी टी. वक�) (जगदीश) (Jagadish) (ABY. T. Varkey) लेखा सद! /Accountant Member �ाियक सद! / Judicial Member चे�ई/Chennai, �दनांक/Dated: 30th September, 2024. EDN/-

आदेश क� �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकर आयु�/CIT, Chennai 4. िवभागीय �ितिनिध/DR 5. गाड� फाईल/GF