M/S. SANJAY GOLD PALACE,CHENNAI vs. ITO, NON CORP. WARD 6(3), CHENNAI

PER S. R. RAGHUNATHA, ACCOUNTANT MEMBER:

This appeal by the assessee is filed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2017-18, dated 07.12.2023.

:-2-: ITA. No: 1629/Chny/2023 115BBE of the Income-tax Act, 1961 (hereinafter referred to as “the Act”).

:-3-: ITA. No: 1629/Chny/2023 4. Aggrieved by the impugned order, the assessee preferred an appeal before the ld.CIT(A). Before the ld.CIT(A), the assessee reiterated that it was trader in Gold jewellery and bullion and assessed to TNVAT Act. The assessee maintained regular books of accounts with stock inventory. The assessee furnished purchase bills, sales register, cash book and demonstrated that the cash was deposited in SBN was out of sales proceeds of stock on hand. The assessee also relied on the following judgments: (i) CIT vs Devi Prasad Vishwnath Prasad [1969] 72 ITR 194 (SC) (ii) Mehta Parikh & Co 30 ITR 181 (SC) (iii) CIT vs Kailash Jewellery House – ITA 613/2010 Delhi HC (iv) Kishore Jeram Bhai Khaniya vs ITO – ITA 1220/Del/2011, ITAT Delhi (v) CIT vs Vishal Exports Overseas Ltd –TA No. 2471 of 2009 Guajarat HC (vi) New Pooja Jewelers vs ITO – ITA 1329/Kol/2018, ITAT Kolkata (vii) CIT vs Jaora Flour and Foods (P) Ltd [2012] 344 ITR 294 22 Madhya Pradesh HC

and pleaded to delete the addition made by the AO. The ld.CIT(A), after considering the submissions made by the assessee and case laws relied upon by the assessee, held that

:-4-: ITA. No: 1629/Chny/2023 the assessee’s submissions with regard to cash deposits during demonetization period is without any supporting documents and evidences and case laws relied upon by the assessee are not applicable to the facts of the present case. Accordingly, the ld.CIT(A) on relying upon the decision of ITAT Bangalore in the case of Bhoopalam Marketing Services Pvt Ltd vs ACIT in ITA NO. 375/Bang/2022, dated 15.09.2022, sustained the additions made by the ld.AO u/s. 69 r.w.s. 115BBE of the Act and dismissed the appeal filed by the assessee. Aggrieved by the impugned order of the ld.CIT(A), the assessee preferred an appeal before us.

:-5-: ITA. No: 1629/Chny/2023 6. Per contra, the ld.DR, on the other hand relied on the actions of the Assessing Officer and the ld. CIT(A), after considering the submissions has rightly confirmed the addition of cash deposits u/s. 69B r.w.s. 115BBE of the Act and their order should be upheld.

:-6-: ITA. No: 1629/Chny/2023 Act, the assessee had furnished cash book, sales register, purchase register, bank statements along with stock registers for the relevant period. The stock moved out of the books on account of sales made by the assessee has established from stock register. The VAT returns for the relevant period reflected such sales which have been accepted by the VAT authorities. The assessee has maintained proper books of accounts which are subjected to tax audit u/s. 44AB of the Act. The assessee also maintained quantitative details of the stock and furnished before the lower authorities. The books of accounts of the assessee have been accepted by the lower authorities while framing the assessment and not rejected by pointing out any defects.

:-7-: ITA. No: 1629/Chny/2023 by relevant evidences. Thus, the assessee has discharged the burden of proving the source of the cash/SBN deposited in the bank and the Assessing Officer failed to rebut the same. The allegations/statistics relied upon by Assessing Officer to take an adverse view is not backed up by relevant evidence/material and therefore the impugned action of authorities below cannot be countenanced. Moreover, since cash generated out of sales has been credited in the books of accounts, the provisions of section 69A could not be invoked in the present case. The assessee’s reliance on the coordinate bench decision in the case of Smt. Durga Devi Mundhra vs ITO in ITA No. 1228/Chny/2023, dated 25.04.2024 is squarely applicable to the present case on hand, wherein the Tribunal held as under: “6. We are of the considered opinion that when the sale has been reflected in the books of accounts and offered to tax, adding the same again would amount to double taxation which is impermissible in law. The cash sales proceeds have been credited in the books of accounts and the same form part of assessee's cash book. On these facts, it could very well be said that the assessee's claim was backed up by sufficient documentary evidences. The allegation of Ld. AO is that such abnormal sales could not be achieved by the assessee immediately upon announcement of demonetization by the Government. However, such allegations are bereft of any concrete evidence on record. It is trite law that no addition could be made merely on the basis of suspicion, conjectures and surmises. In the present case, the assessee has duly discharged the burden of establishing the source of cash deposit and the onus was on Ld. AO to disprove the same.

:-8-: ITA. No: 1629/Chny/2023 However, except for mere allegation and few statistics, there is nothing on record to support the conclusions drawn by Ld. AO that the cash deposited by the assessee was her unaccounted money. There is no finding by Ld. AO that any particular sales affected by the assessee exceeded threshold limit which cast an additional obligation on the assessee to obtain requisite particulars from the customers. Since cash generated out of sales has been credited in the books of accounts, the provisions of Sec.69A could not be invoked in the present case. Therefore, on the given facts, the impugned additions are not sustainable. By deleting the same, we allow corresponding grounds raised by the assessee.”