GIRDHARI LAL MEENA,JAIPUR vs. INCOME TAX OFFICER, JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 118/JP/2023 fu/kZkj.k o"kZ@Assessment Years : 2017-18 Mr. Girdhari Lal Meena cuke ITO, 59, Pashupati Nath Nagar, Vs. NFAC, Delhi Shyopur, Sanganer, Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AIMPM 8651 R vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri S. K. Gogra (C.A.) jktLo dh vksj ls@ Revenue by : Sh. Anup Singh (Addl. CIT) a lquokbZ dh rkjh[k@ Date of Hearing : 09/08/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 05/10/2023 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal is filed by the assessee aggrieved from the order of the National Faceless Appeal Centre, Delhi [Here in after referred as (NFAC) ] for the assessment year 2017-18 dated 09.01.2023, which in turn arises from the order passed by the AO, CPC, Bangaluru passed under Section 143(3) of the Income tax Act, 1961 (in short 'the Act') dated 09.12.2019.

2 Girdhari Lal Meena vs. ITO 2. The assessee has marched this appeal on the following grounds:- “

1. That action of Ld AO in doing addition while passing the assessment order is bad in law, perverse and against the facts and law. Further action of Ld CIT(Appeal), NFAC in so far as confirming addition as made by Ld AO is absolutely illegal and unjustified in the facts & circumstances of the case.

2. That the Ld AO has grossly erred in doing addition of Rs.8690500/- of cash deposited in his bank account during demonetization period whereas same is arising out of sale of diesel/ petrol and thus Ld AO has grossly erred in appreciating facts of the case by wrongly treating the same as unexplained cash and which may please be please be deleted.

3. That AO has erred in doing trading addition @ 0.90% based on the comparative Gross Profit of preceding year which may please be directed to be deleted.

4. That Ld AO has grossly erred in determination of tax @ 60% by applying the provisions of section 115BBE for the AY 2017-18 whereas substantial provision of section 115BBE has come into statute book w.e.f.1.4.2017 i.e. after getting assent from the President. Thus Ld AO without having any application of mind has imposed tax at higher rate and which may please be deleted.

5. That action of Ld CIT (Appeals), NFAC, Delhi is perverse so far as mechanically confirming the addition as made out by the Ld AO which may please be declared as illegal.

6. That the appellant craves leave to add, amend or alter any of the ground to this appeal with the request to allow to submit written submission at the time of hearing of appeal.”

3. The fact as culled out from the records is that the assessee is an authorized dealer of HPCL and running a petrol pump in the name and style of M/s. Tibra H. P. Jaipur as a proprietary concern. As per computation of income the assessee has declared business

3 Girdhari Lal Meena vs. ITO income of Rs. 3,07,129/- and income from other sources of Rs. 84,010/- after claiming current year loss of Rs. 2,00,000/- and claimed deduction of Rs. 49,467/- under chapter VIA, total income was declared at Rs. 1,41,670/- and thus return of income was e- filed u/s 139(1) of the Income-tax Act 1961 on 07.11.2017 declaring total income of Rs. 1,41,670/-.

3.1 The case of the assessee was selected for scrutiny through CASS, therefore notice u/s 143(2) of the Income-tax Act, 1961 was issued on-line on 22.09.2018, which was served upon the assessee through E-mail but compliance of the same was not made. Further, on change of incumbent and in order to complete the proceedings, notice 142(1) along with detailed questionnaire was issued on 05.10.2019 fixing the case for hearing on 11.10.2019 but same is also remained non complied. Therefore, to grant last opportunity to the assessee, a final show-cause u/s 144(1) was issued on 23.11.2019 fixing the case for hearing on 27.11.2019. In compliance to the notices issued, the AR of the assessee submitted on-line reply and furnished the copy of cash book from 09.11.2016 to 30.12.2016, GP. Comparison chart, copy of bank statement, month wise cash sales and cash deposit chart for A.Y 2017-18 and copy of VAT return only. He mentioned that 3.2 In the assessment proceeding the ld. AO noted that the comparative chart for gross profit / net profit ratio of last two years shown by the assessee is in lower side in comparison to preceding year. As the gross profit declared by the assessee is decline therefore, the necessary explanation called for from the assessee and asked to produce the same. In absence of the books of account being not presented, trading result declared by the assessee in the opinion of the ld. AO cannot be accepted and therefore, the assessee was given the show cause notice on 01.12.2019 for the case of the assessee for hearing on 04.12.2019. As the assessee did not complied with the notices so issued and did not produced the books of accounts, bills/vouchers for verification and thus the trading result submitted by the assessee not accepted and the books of accounts rejected invoking the provisions of section 145(3) of the Act. Considering the interest of the justice and the past trend ld. AO applied Gross profit @ 2.8 % as shown in A. Y. 2016-17. Based on this the 3.3 Further, as per information available on record, the assessee has deposited cash of Rs. 74,35,500/- in the bank account no. 3420787121 maintained with the State Bank of India and Rs. 12,55,000/- in the account no. 3241071566 maintained with the Central Bank of India during the demonetization period. Thus, the assessee has deposited a total sum of Rs. 86,90,500/- during the demonetization period but source of such cash deposits was not explained. Therefore, on this issue explanation called for from the assessee vide show cause notice dated 01.12.2019 fixing the case for hearing on 04.12.2019 but the assessee did not complied with. As no explanation regarding the source of this cash deposit appearing in the bank account during the demonetization and the assessee did not furnished any details like stock register, sale details, breakup of SBN and non SBN deposit made in the account and purchase bills. Therefore, in the absence of the same source of such case deposit during demonetization considered as unexplained. Considering the aspect of the matter cash deposit of ₹86,90,500 during the demonetization treated as unexplained cash

“6. Decision 6.1 As mentioned above under Para 4 of this order, the appellant was accorded sufficient number of opportunities of being heard, but the appellant chooses not to avail any of the opportunity by not responding to any of the hearing notices. However, the case is being taken up for adjudication on the basis of details available on record in the form of Assessment order, Statement of facts & Grounds of appeal filed by the appellant. 6.2 The brief facts of the case are that as per the OCM (Operation Clean Money) data, the assessee had deposited cash of Rs. 74,75,500/- in A/c no. 34207871121 of State Bank of India and of Rs. 12,55,000/- in a/c. no.3241071566 in Central Bank of India (Totaling to Rs. 86,90,500/-) during the F.Y. 2016-17. Appellant had filed the Return of income for A.Y. 2017-18 at a total income of Rs. 1,41,670/-. Accordingly, in order to examine the source of cash deposits, the AO picked up the case for scrutiny by issuing notice u/s. 143(2) dated 22.09.2018. Thereafter, a detailed questionnaire u/s. 142(1) was issued and due to none compliance the AO issued a final show cause notice dated 01.12.2019 as appearing under para 1 of the assessment order. The AO also required the assessee to produce complete books of accounts along with bills and vouchers which were not produced. 6.2.1 The AO under para 3 of his order observed that the GP for the AY 2017-18 @ 2.3 % was less in comparison to preceding year GO of 2.8 %, thereby the assessee was required once again to produce the complete books of account but assessee did not complied. In the absence of books of account for verification the AO rejected the trading result submitted by the assessee by invoking the provisions of section 145(3) of the Act and applied a GP @ 2.8% as shown by the assessee for the preceding AY 2016-17. Further, in the absence of any explanation in respect of source cash deposit in bank accounts, the AO

7 Girdhari Lal Meena vs. ITO added the cash credit of Rs. 80,90,500/- u/s 68 of the Act Aggrieved by the order the assessee has filed this appeal. 6.3 Ground no.1 of the appeal is on the issue of addition of Rs. 86,90,500/-. Since the only issue involved is of addition made u/s 68 on account of unexplained money found credited in the bank account of appellant. It is imperative to look upon the ratios laid down by the various Hon'ble Courts in respect of unexplained credit/money found credited in the books / bank accounts of the assessee. 6.4 The fundamental question involved is that whether or not the AO was justified in making the addition of Rs. 86,90,500/- under section 68 in the hands of the assessee, and the most critical thing to be examined in this regard is explanation of the assessee with respect to these credits. There is no, and there cannot be any, dispute on the fundamental legal position that the onus is on the assessee to prove 'bonafides' or 'genuineness' of the money credited in his books/ bank account. This approach finds support from the scheme of Section 68/69, which provides that where any sum is found credited in the books / bank accounts of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, such sum may be charged to income tax as the income of that assessee for that previous year. The burden is thus on the assessee to prove the nature and source thereof, to the satisfaction of the Assessing Officer. Everything thus hinges on the explanation given by the assessee and on how acceptable is the explanation so given by the assessee. The next question is as to what the kind of explanation that the assessee is expected to give. 6.5 As noted by Hon'ble Delhi High Court, in the context of issuance of share capital and in the case of PCIT Vs Youth Construction Pvt Ltd [(2013)357ITR197 (Del)], "It Involves three ingredients, namely, the proof regarding the identity of three applicants, their creditworthiness to purchase the shares and the genuineness of the transaction as a whole". 6.6 That is the approach adopted by Hon'ble Courts above all along. In the case of CIT v. United Commercial and Industrial Co (P) Ltd [1991] 187 ITR 596 (Cal)], Hon'ble Calcutta High Court has held that under the scheme of Section 68" it was necessary for the assessee to prove prima facie the identity of creditors, the capacity of such creditors and lastly the genuineness of transactions" 6.7 Similarly, in the case of CIT v. Precision Finance (P.) Ltd. [1994] 208 ITR 465 (Cal)], it was observed that “It is for the assessee to prove the identity of creditors, their creditworthiness and genuineness of transactions.”

8 Girdhari Lal Meena vs. ITO 6.8 While examining the issue of genuineness of the transactions entered into by the assessee, it is also important to keep in mind Hon'ble Supreme Court's observation, in the case of CIT v. Durga Prasad More [(1971) 82 ITR 540 (SC)]. to the effect that "Science has not yet invented any instrument to test the reliability of the evidence placed before a court or tribunal. Therefore, the courts and Tribunals have to judge the evidence before them by applying the test of human probabilities". 6.9 Similarly, in a later decision in the case of Sumati Dayal v. CIT [(1995) 214 ITR 801 (SC)]. Hon'ble Supreme Court rejected the theory that it is for alleger to prove that the apparent and not real, and observed that, This, in our opinion, is a superficial approach to the problem. The matter has to be considered in the light of human probabilities............Similarly the observation..........that if it is alleged that these tickets were obtained through fraudulent means, it is upon the alleger to prove that it is so, ignores the reality. The transaction about purchase of winning ticket takes place in secret and direct evidence about such purchase would be rarely available..... In our opinion, the majority opinion after considering surrounding circumstances and applying the test of human probabilities has rightly concluded that the appellant's claim about the amount being her winning from races is not genuine. It cannot be said that the explanation offered by the appellant in respect of the said amounts has been rejected unreasonably". 6.10 An addition under Section 68 can be made where any sum is found credited in the bank account for any previous year, and the assessee either offers no explanation about the nature and source as regards the same, or the explanation offered by him in the opinion of the assessing officer is not found to be satisfactory. That before adverting further, the relevant extract of the aforesaid statutory provision, viz. Section 68, which reads as under: "Cash credits.

7. Ground no. 2 is in respect of rejection of books of accounts. As can be seen the AO has rejected the books of accounts after observing a fall in the GP results of assessee for the instant year in comparison to last year and due to assessee's none compliance to produce the books of accounts along with bills/vouchers for proper verification/examination of his trading results, the AO/being unable to examine the trading results thus having no other option, rejected the books. Even during the course of entire appellate proceedings, the appellant has not filed any details/ documents in support of his claim. In the absence of any evidence brought on record by the appellant, I found no reasons to interfere with the stand taken by the AO, accordingly, Ground No:2 of the appeal is also dismissed.

8. Ground no. 3 is consequential and ground no 4 & 5 are general in nature, need no adjudication, hence stands dismissed for statistical purposes. Order passed u/s 250 r.w.s 251 of the I.T. Act, 1961.”

10 Girdhari Lal Meena vs. ITO 5. As the assessee did not receive any favor from the appeal so filed before the ld. CIT(A). The assessee prefers the present appeal. The ld. AR appearing on behalf of the assessee has placed their written submission on record and the same is extracted here in below;

“Most respectfully it is submitted that the appellant is submitting the Written Submissions which are relevant in the case and same may please be considered while deciding the appeal:- GROUND NO.1: ERRONEOUSLY DOING ADDITION OF RS.8690500/- U/S.68 OF SALE OF PETROL/DIESEL DURING DEMONETIZATION PERIOD 1. That the appellant is running a petrol pump of HPCL in the name and style of M/s. TIBER HP at Village-Shyampura, Tehsil:Bassi, Distt: Jaipur. Copy of License issued by Hindustan Petrolium Corporation Ltd. having license no.88/2013 dt.25.4.2013 is enclosed as Annexure- A. That Ld AO has made addition into total income during demonetization period i.e. 9.11.2016 to 31.12.2016 of cash deposited of Rs.8690500/- (Rs. 7435000/- in a/c no. 34207871121 in SBI Bank) and (Rs.1255000/- in a/c no. 3241071566 in Central Bank of India) arising out of sale of petrol/ diesel in its regular course of business and which are wrongly treated as unexplained deposit by Ld AO and added into total income. That appellant has submitted GP Comparison chart, bank statement, monthwise cash sales and cash deposit chart, VAT returns. But despite of submission of all these documents the Ld AO has erred in doing addition into total income of Rs.8690500/- without any basis and without bringing any contrary evidence on record and same is treated as unexplained credit u/s.68 of IT Act whereas there is no iota of evidence have been brought on record by Ld AO to treat the same as unexplained and further provision of section 115BBE is also invoked and which is absolutely illegal and unjustified in the facts & circumstances of the case. That summary position of cash deposit during demonetization period is given as below:-

PARTICULARS Amount (In Rs.) Amount (In Rs.) f/year 2015-16 f/year 2016-17 Opening cash balance as on 8.11.2016 825001.00 5206068.00

Add: Cash received on sale of petrol/ diesel in November, 2016 5614520.00 6960972.00 Add: Cash received on sale of petrol/ diesel in December, 2016 3955328.00 5033603.00 Less: Cash deposited in bank in November, 2016 5164990.00 9788800.00 Less: Cash deposited in bank in December, 2016 5444850.00 4729113.00 That by going through with above chart it is clear and explicit that there is opening cash in hand as on 8.11.2016 of Rs.5206068/- and which is cash sale collection of previous months and further on comparison analysis it comes out that lower cash is deposited in the month of December,2016 than cash as deposited in December,2015. That during f/year 2016-17 appellant has withdrawl cash from the bank account wherein single withdrawl of Rs.10,00,000/- is made from bank on dt.20.4.2016 and apart from same there is opening cash balance of Rs.413423/- as on 1.4.2016 as per audited balance sheet for f/year 2015-16 (31.3.2016). Copy of cash book for relevant months and bank statement of Central bank of India and SBI Bank for f/year 2016-17 are enclosed herewith and marked as Annexure-B (colly). Thus it is crystal clear that there is no case of additional cash deposited in bank account.

2. That Ld AO has grossly erred in contending that appellant has not produced the stock register whereas same was submitted vide submission letter dt.27.11.2019 (copy of submission letter is annexed as Annexure-C). That stock register is maintained on day to day basis in accordance with requirement of Oil Companies depicting therein details of inward, outward, evaporation etc. Comparison chart of the stock register showing therein the stock movement during the months of November-December,2015 and November-December,2016 are given as below:- Comparison Chart showing details of Stock movement (M.S. – Petrol) during the month of Nov.& Dec.,2015 with Nov. & Dec.,2016

MONTH Name of Inward Outward Qty. MONTH Inward Qty. Outwa commodity Qty. rd Qty. Nov.2015 M.S. (petrol) 34000 36753 Nov.2016 49000 45208

Dec.2015 M.S. (petrol) 35000 37289 Dec.2016 32000 33787 Stock register is annexed as Annexure-D(i).

Comparison Chart showing details of Stock movement (High Speed Diesel – HSD) during the month of Nov.& Dec.,2015 with Nov. & Dec.,2016

MONTH Name of Inward Outward MONTH Inward Qty. Outward commodity Qty. Qty. Qty. Nov.2015 HSD – diesel 114000 109752 Nov.2016 163000 159259 Dec.2015 HSD – diesel 65000 71967 Dec.2016 69000 66875 Stock register is annexed as Annexure-D(ii). That on going through with above comparison chart it is crystal clear that there is higher quantity of diesel purchase and sold during the months of November-December, 2016 then in comparison to November-December,2015. Thus accordingly there is quiet justification about cash collection and deposition in the bank account by the appellant. It is to submit that petrol/diesel are sold at their pre determined prices and no higher price can be collected from any of buyers, thus there is no way to manipulate stock quantities and its sale price and further more the books and stock record are under regular check by D.S.O. and by HPCL. Thus action of Ld AO in contending about deposition of cash during demonetization period does not stands any where. That monthwise chart of stock received and out during f/year 2016-17 of Petrol/diesel is enclosed as Annexure-D.

3. That Ministry of Finance vide F.No.10/3/2016-Cy.I dated 8.11.2016 has issued Notification whereby exemption was given for acceptance of old currency notes having denomination of Rs.500/- & Rs.1000/- during the period of 9.11.2016 to 15.12.2016 and which is further extended by Notification no.:2774 dt.24.11.2016 and wherein exemption were given “for purchase of petrol, diesel and gas at the stations operating under the authorization of Public Sector Oil Marketing Companies.” Copy of all these Notification are enclosed as Annexure-E. Thus the appellant was allowed to accept old SBN notes during demonetization period.

4. That appellant has filed all relevant documents and these were submitted before Ld AO vide letter dated 27.11.2019 and wherein parawise reply to the queries raised by AO were submitted (annexed as Annexure-C). That against the impugned assessment order, appellant filed appeal before the CIT(A), NFAC and this being the new mechanism of faceless appeal and wherein appellant has filed adjournment application for submission of documents and which is filed on dt.07.01.2023 and wherein request was made for adjournment for two weeks i.e. upto 24.1.2023 but Ld CIT(A) ignored said application and without taking into consideration of said application has passed the appeal order and thus Ld CIT(A) has acted in very hurried manner and wherein without looking to the adjournment application, the appeal 13 Girdhari Lal Meena vs. ITO order is passed and which is absolutely illegal and unjustified in the facts & circumstances of the case and thus the appellant deprived by submission of its entire records and documents. Screen shot of adjournment application as filed on IT portal is annexed herewith as Annexure-F.

5. That appellant is separately submitting the application u/rule 29 of ITAT Rules,1963 for submission of additional evidence i.e. documents which could not be submitted before both the lower authorities and which are quiet essential and crucial for decide of the case. That application u/rule 29 of ITAT Rules is separately filed and which may please be allowed in the interest of justice. GROUND NO.2 : ERRONEOUSLY INVOKING SECTION 145(3) AND DOING GROSS PROFIT ADDITION @ 0.50% (i) That Ld AO has grossly erred in doing rejecting the books of accounts by invoking provision of section 145(3) and has made GP addition @ 0.50% without any basis. That sale price of petrol/diesel are fixed by HPCL and there is no control over those prices and on which fixed percentage of commission are given to dealer by HPCL. That to maintain fixed/permanent customers discount in form of lowering of sale price are required to be given and thus there is no chance and mechanism to charge/ collect higher sale price then offered by supplier company. That comparative turnover and GP Chart are given as below:-

AY Turnover (Rs.) Gross Profit G.P. ratio 2016-17 79191895.00 2219555.00 2.80% 2017-18 91298333.00 2096301.00 2.30%

That there is turnover hike by Rs.12106438.00 during the impugned period and to get increase in sale, it is inevitable to reduce GP to achieve higher turnover. (ii) That Ld AO has erroneously rejected books of accounts on the reason that no stock record has been produced whereas stock record are maintained on online system of HPCL and is available publicly on HPCL portal. Further books of accounts of assessee are audited and has filed return of income alongwith audit report in form 3CD alongwith all enclosures wherein quantitative details of petrol/diesel received, supplied alongwith opening and closing balance quantities are written and thus accordingly despite of having availability of stock record on public domain, finding about non submission of stock record is erroneous finding of Ld. AO. Copy of IT return and audit report for AY 2017-18 and AY 2016-17 are annexed herewith as Annexure-G.

That in below cases it is held by Hon’ble Courts that when proper books of account along with duly audited by Form 3CD, requisite details are before Ld. AO then there is no justification for rejecting the books of account and making estimated addition on gross profit:- (a) CIT vs. Gotan Lime Khanij Udyog, 256 ITR 243 (Raj. High Court) (b) Ajay Goyal vs. ITO, 99 TTJ 164 (copy of judgments are attached) Thus when there is no basis with both the lower authorities in doing GP addition and under these circumstances action of Ld AO and Ld CIT(A) may please be held erroneous and GP addition made may please be deleted. GROUND NO.3 : ERRONEOUSLY APPLYING PROVISION OF SECTION 115BBE LEVYING TAX @60% That Ld AO has erred in levying provision of Section 115BBE by doing addition u/s.68 of IT Act whereas this being the substantive provision made in the statute books w.e.f. 01.04.2017 only i.e. after getting assent from the President of India dated 15.12.2016 itself and thus can not be implemented prior to getting assent from President of India and thus can never be retrospective in nature. That it is further to submit that there can not be two rate of tax in one financial year simultaneously wherein prior to getting consent from President i.e. upto 15.12.2016 and thereafter. It is further to submit that Ld AO has made addition of cash which is deposited during demonetization period i.e. up to the period of 15.12.2016 and upto when section 115BBE did not come into existence, and thus action of Ld AO may please be declared as illegal and be deleted. That Jabalpur ITAT in the case of ACIT Vs. Sandesh Kumar Jain (Jabalpur ITAT in ITA no.: 41/JAB/2020 has decided that provision of Section 115BBE being substantive provision can never be retrospective in nature and become effective only after getting assent from President of India i.e. on dt. 15.12.2016 and there can not be two rate of tax in one year, thus it is made effective w.e.f. 01.04.2017 only. (copy of order enclosed) PRAYER 1. It is humbly requested to delete addition made into total income of Rs.8690500/-.

Sr. No. Particulars Page No. 1. Written submissions to the Hon’ble ITAT 1-5 2. Form No. 36 (memo of appeal before ITAT) 6-8 3. Order of CIT(Appeals dt. 09.01.2023 9-14 4. Form no. 35 with Grounds of appeal

15-17 5. Assessment order dt. 09.12.2019 18-23 6. Copy of License issued by HPCL (annexure-A) 24-26

7. Copy of cash book for F/year 2016-17 and f/year 2015-16 27-131 and bank statement (annexure-B)

8. Letter dt. 27.11.2019 for submission of documents before 132-133 AO (annexure-C)

9. Copy of Stock Register for f/year 2015-16, F/years 2016- 134-185 17 of Petrol and Diesel (annexure-D)

10. Gazattee Notification no. 10/03/2016 dt. 8.11.2016 and 186-189 No. 2774 dt. 24.11.2016 (annexure –E)

11. Screen Shot of adjournment application filed before 190-191 CIT(A) on dt. 7.11.2023 (annexure –F)

12. Copy of Income tax return for assessment year 2017-18, 192-218 2016-17 with trading and P & L a/c for showing of GP ratio (annexure-G)

13. Judgments relied upon 5.2 The ld. AR of the assessee made an application u/r 29 of ITAT Rules, 1963 praying to allow the submission of the additional evidence:

16 Girdhari Lal Meena vs. ITO “APPLICATION U/RULE 29 OF ITAT RULES, 1963 FOR ALLOWING TO SUBMIT ADDITIONAL EVIDENCES MAY IT PLEASE BE YOUR HONOURS, 1. Most respectfully the humble appellant do hereby seeks leave of the Hon'ble Bench for allow to submit Additional Evidences in support of the case which are quiet essential and crucial for decide of the case. That additional evidences which are being submitted are consisting of below documents:- (i) M.S. Petrol and HSD stock record inward and outward during financial year 2015-16 and 2016-17 maintained as per requirement of HPCL (ii) Copy of Purchase Invoices of material inward from Hindustan Petroleum Corporation Limited That stock register was filed before Ld AO during the course of assessment vide submission dt.27.11.2019 and all these documents were about to submit by the appellant before the CIT(A) and for which adjournment application was submitted on dated 07.01.2023 on online IT Portal and wherein request was made for adjournment for two weeks i.e. upto 24.1.2023 but without rejecting said application the appeal order dated 09.01.2023 is passed and thus Ld CIT(A) has acted in very hurried manner and wherein without looking to the adjournment application, the appeal order is passed and which is absolutely illegal and unjustified in the facts & circumstances of the case. The screen shot of adjournment application as filed on IT portal is enclosed herewith as Annexure-

1. 1.

2. Thus looking factual aspect of the case the above documents which are in form of additional evidences are crucial and which justifies that there is regular maintenance of stock record on day to day basis and which is also audited by the HPCL, thus in these circumstances there is no room for getting deposition of cash in guise of sale collection of petrol/HSD.

3. That the Hon'ble Tribunal has discretionary powers to entertain the additional evidence and for which it is humbly requested to kindly consider and allow additional evidence on record. That in support of our contention below judgements are being submitted. (i) That Hon'ble ITAT, Jaipur Bench in the case of Rajendra Pathak Vs. Asstt. DIT (2015-124-DTR-337) has held that "Whatever evidences filed along with the prayer go to the root of the cause, we consider that these documents are required to be filed and to be considered for disposal of this appeal" and thus additional evidences as filed by the appellant are allowed.

17 Girdhari Lal Meena vs. ITO (ii) That Hon'ble Delhi High Court in the case of CIT Vs. Text Hundred India Pvt. Ltd. (2013-351-ITR-page57-Delhi High Court). The Hon'ble Delhi High Court in para no. 10 has observed as under:-"We may in this connection referred to the scope of the powers of Tribunal under rule 29 of the Tribunal Rules. In R.S.S. Shanmugam Pilai & Sons Vs. CIT (1974-95 ITR-109). This Court had occasion to go into the question of the powers of the Tribunal to entertain or reject of evidence, while accepting that the Tribunal has got a wide discretion to admit or reject documents at the stage of appeal, it was pointed out that such a discretion can not be exercised in an arbitrary manner, that if the Tribunal found that the document filed are quiet relevant for purpose of deciding this issue arising before, it would be well within its powers to admit the evidence, consider the same or remit the matter to the lower authorities for such consideration." The Hon'ble Delhi High Court has referred and relied upon the various decisions of the difference High Courts and have also relied upon the decision of the Hon'ble decision of Supreme Court reported in K. Venkatramaiah Vs. A. Seetharam Reedy, AIR-1963-S.C.-1526. This judgment of the Hon'ble Supreme Court is placed by the Hon'ble Delhi High Court in their judgment in para 12. (iii) National Thermal Power Co. Ltd. Vs. Commrr. of Income tax (1998-229- ITR-page 383) Supreme Court That in the case it has been held by Hon'ble Supreme Court that "Undoubtedly, the Tribunal will have the discretion to allow or not a new ground to be raised. But where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee." (copy of above judgments are enclosed herewith) The humble appellant request to kindly allow the additional evidences in the interest of equity and justice & oblige.”

5.3 The ld. AR of the assessee to drive home to the contentions so raised has relied upon the following decisions:-

 Rajendra Pathak v. Asstt. DIT (2015) 173 TTJ 68 (Jp. Trib)

18 Girdhari Lal Meena vs. ITO  Commissioner of Income-tax-iv v. Text Hundred India (P.) Ltd. (2013) 351 ITR 57 (Hel-HC)  National Thermal Power Co. Ltd. v. CIT (1998) 229 ITR 383 (SC)  Ajay Goyal vs. ITO (2006) 099 TTJ 0164 (Jodh-Trib)  CIT v. Gotan Lime Khanij Udhyog (2002) 256 ITR 243 ( Raj- HC)  ACIT vs. Sandesh Kumar Jain ITA No. 41/JAB/2020 dated 31.10.2022(Jabalpur-Trib)

5.4 The Bench directed the ld. AR to file the summary of the cash position as on the date of demonetization, cash sales made on the dates were the assessee permitted to accept the SBN and details of the cash deposit. The said details were submitted on 19.07.2023. The summary of the same is reproduced as under:-

“May it please be your Honours, That on the previous date of hearing the Hon’ble Bench has asked to submit the details of cash collection and cash deposition during demonetization and in compliance thereof the cash Summary during the period of 9.11.2016 to 31.12.2016 are annexed as Annexure-A. That summary cash position is given as below:- Particulars Amount (In Rs.) Opening cash balance as on 9.11.2016 5116867 Add:- Cash Sales (during 9.11.2016 to 30.11.2016) +4643367 Add:- Cash Sales (during 1.12.2016 to 15.12.2016) +2149893 Add:- Cash Sales (during 16.12.2016 to 31.12.2016) +2883710 Less:- Cash deposit in bank during -9438500 9.11.2016 to 30.11.2016 1.12.2016 to 15.12.2016 -2183000 16.12.2016 to 31.12.2016 -2531500 Closing balance as on 31.12.2016 674224 That accordingly the details of cash balance as on 9.11.2016 is also complied and given as below:- Details of opening cash balance as on 9.11.2016 Particulars Amount (In Rs.) Opening cash balance as on 1.4.2016 413423 Add:- Cash Sales (during 1.4.2016 to 8.11.2016) +49662360 Add:- Cash collection from buyers/debtors (out of credit +3325669 sales)

Add:- Cash withdrawal from bank +1187000 Total 54588452 Less: Cash deposit in bank during 1.4.2016 to 8.11.2016 -49157000 Less: Salary, office & other expense (in cash) -314585 Closing balance as on 8.11.2016 5116867 That detailed ledger account of cash sales, cash collection from buyers/debtors, cash withdrawal and deposit from bank during the period of 1.4.2016 to 8.11.2016 are enclosed as Annexure-B”

5.5 The ld. AR of the assessee in addition to the written submission so filed also argued that the assessee is registered petroleum product dealer. During the period of demonetization the assessee was permitted to accept the SBN notes against the sale of petroleum products as per notification no. 2653 dated 8.11.2016 (APB-188) and thereby the date was extended till 15.12.2016. As the assessee permitted to accept the SBN he has deposited the same till 15.12.2016 and therefore, the cash so received by the assessee is against the sale proceeding of the petroleum product by the assessee. The ld. AR of the assessee further submitted that the assessee objects to the figure of the addition of Rs. 86,90,500/- . As the assessee has cash sales during the demonetization period from 09.11.2016 to 30.11.2016 and 01.12.2016 to 15.12.2016 Rs. 46,43,367 and Rs. 21,49,893/- respectively totaling to Rs. 67,93,260-. Whereas the assessee has deposited the cash into the Cash deposit in bank during

09.11.2016 to 30.11.2016 Rs. 94,38,500/- 01.12.2016 to 15.12.2016 Rs. 21,83,000/- 16.12.2016 to 31.12.2016 Rs. 25,31,500/- Thus, he argued that the ld. AO has not appreciated the correct facts. Since, the assessee permitted to accept the SBN notes for a particular date the same being against the sale proceeds already recorded in the book of account same cannot be again added as unexplained cash deposit when the sale proceeds has already been considered by the ld. AO. As regards the contention of the ld. AO that the assessee has not produced the stock register and copy of purchase bill the same is placed on record as additional evidence so as to justify the sales. The ld. AR of the assessee submitted that the assessee is covered under the essential commodity act and he has to maintained daily stock register as per government record and therefore, sales and purchase made by the assessee is already recorded in the books of account of the 22 Girdhari Lal Meena vs. ITO assessee. The ld. AR of the assessee heavily relied upon the submission made before the ld. AO and the same is reiterated here in below for the sake of convenience :

In compliance to the notices issued, the AR of the assessee submitted on-line reply and furnished the copy of cash book from 09.11.2016 to 30.12.2016, GP. Comparison chart, copy of bank statement, month wise cash sales and cash deposit chart for A.Y 2017-18 and copy of VAT return only. He mentioned that interest amount of Rs. 64,379/- paid to M/s. Toyota Finance on which TDS was not deducted has been added in the computation of income.

The ld. AO not disputed the sales proceeds recorded in the VAT report and cash book so filed. The ld. AO was also given the monthwise stock vide submission dated 27.11.2019 and therefore, he has not disputed the quantitative records and sales. The only contention that he recorded in the assessment order is that “the assessee was asked to produce the books of accounts, bills and vouchers but has not produced.” This contention is incorrect as the assessment was under ITBA online module where in there is no provision to upload the books of accounts. In fact the assessee has submitted almost all records and instead of finding fault on its merely contended that books of accounts are not produce. The assessee has already filed the cash book, sales and month wise stock details, on these records no defects is pointed out.

23 Girdhari Lal Meena vs. ITO 5.6 The ld. AR of the assessee also submitted that the assessee requested for an adjournment on 07.01.2023 and sought and adjournment upto 24.01.2023 (APB-190) but ultimately the order was passed on 09.01.2023 without dealing with the adjournment application of the assessee. The judicial decision cited by the ld. CIT(A) are clearly not applicable based on the facts already on record. The monthly stock summary was given and there is no adverse remark even the stock is daily maintained the same is given just to confirm and satisfy that the assessee is covered by the essential commodity Act and the assessee without purchase cannot sale the goods and the assessee purchase the goods from HPCL which is not under dispute. The assessee has filed the cash book which is also not disputed by the ld. AO. As regards the addition of GP the ld. AO has not rejected the book results by invoking the provision of section 145(3) and thereby pinpointing the defects in the audited books of accounts. The ld. AR of the assessee further submitted that the assessee being the dealer of the petroleum company and the price being fluctuated and there by the commission also the GP cannot be compared and in fact in this line of business net profit should be compared.

24 Girdhari Lal Meena vs. ITO “Kindly refer to the subject mentioned above.

2. In this connection it is respectfully submitted that during the hearing of the said case before the Hon'ble bench, the AR of the assessee, vide his paper book dated 06.07.2023 submitted (in para 2 at page no 2 of the paper book) "that Id AO has grossly erred in contending that the appellant has not produced the stock register whereas the same was submitted vide submission letter dt. 27.11.2019". The assessee has submitted the stock register in annexure-D (page no 134 185) of the paper book dated 06.07.2023. However on perusal of the assessment order it is found that the assessing officer in his order dated 09.12.2019 has categorically mentioned (in para 4 at page no 4 of the assessment order) that the assessee has not furnished any documentary evidences like stock register etc. Therefore, the assessing officer was asked to clarify on this issue vide this office email dated 10.08.2023. In reply to the same, the assessing officer submitted the report (copy enclosed) enclosing the assessee's submission before the AO dated 27.11.2019, wherein it is clear that the assessee has submitted month wise summary of stock, not the complete day to day stock register.

3. The assessee has further requested the admission of the said 'stock register as additional evidence under rule 29 vide letter dated 6/7/23. In his submission, the assessee has stated "That stock register was filed before Ld. AO during the course of assessment vide submission dated 27/11/2019. During the course of hearings before the Hon'ble Bench on 10/08/2023, the Hon'ble Member categorically asked the assessee as to what is the need of filing stock register as additional evidence if the assessee has already submitted it before the AO. The assessee withdrew the additional evidence from record reiterating that the same has been filed before the A.O. during the assessment proceedings.

6. It was reiterated by the undesigned during the course of hearing that the issue of cash deposit during the demonetisation period needs to be scrutinised holistically. The assessee willfully did not produce the books of account (including the stock register) before the AO & the CIT(A).

7. In view of the above, it is seen that the assessee, despite being provided the sufficient time to submit the details by the AO as well as Id. CIT(A), has not furnished the requisite details viz. books of account, bills and vouchers including stock register. Therefore the AO has rightly rejected the books of account in absence of the aforesaid details. The Id. CIT (A) has also concurred with the finding of the AO taking into account the non-compliance of the assessee. In the absence of details

25 Girdhari Lal Meena vs. ITO such as stock register, cash credit u/s 68 was added to the income of assessee & upheld by the Ld. CIT(A). 8. The Hon'ble bench is therefore requested to dismiss the appeal of the assessee for mis- reporting, non-compliance and providing false information before the Hon'ble bench and take rightful action against the AR for misleading the Hon'ble Bench. Respectfully submitted for kind consideration."

6.1 The ld. DR in addition to the written submission so filed also submitted that the case of the assessee is not only on the cash deposit. It is on account of demonetization and therefore, revenue has to see all the aspect of the case as it is on account of operation clean money. The ld. AO asked for the books of account which the assessee could not furnish and therefore, even the GP addition should sustain. As regards the contention that the ld. CIT(A) has not granted adjournment, the ld. DR mentioned that the ld. CIT(A) has granted four adjournments to the assessee. If the assessee really seeks for justice, then case may be remanded back.

26 Girdhari Lal Meena vs. ITO payment is to be made and then the goods is given to the assessee for onward sales to the consumer. The ld. AO has not exercised the option to call for the details from the said petroleum company to verify the purchase as the sale is not disputed. Once the sale is not disputed the consequent cash generated cannot be doubted merely the period in which cash generated on account of the demonetization and the assessee was well within the permitted agency for receipt of the cash and the assessee has not received any cash of SBN beyond the date till they were permitted by the government. Since the assessee has submitted all the details there is no meaning to grant the second inning to the revenue and the appeal be decided based on the evidence already on record.

The assessee has already advanced the reasons for low profit and has submitted the details called, ld. AO only requires the books of account which the assessee submitted that not requirement when the assessment is going on in ITBA and the books are audited. The assessment of the assessee completed u/s. 143(3) of the Act. No specific information was called for and ld. AO only insisted upon the producing of the books of accounts. Since, there is no specific defects observed in the books of accounts the addition made by the ld. AO on account of the low G.P. we see no reason to sustain

30 Girdhari Lal Meena vs. ITO the same. Hence, the addition made by the ld. AO for an amount of Rs. 4,60,052/- on account of the low G. P. is deleted and the finding of the ld. AO rejecting the book result is not correct. Based on these observations the ground no. 3 raised by the assessee is allowed.

31 Girdhari Lal Meena vs. ITO SBN deposit made in the account, the purchase bills, the source of such cash deposit considered as unexplained and addition made for an amount of Rs. 86,90,500 under section 68 of the Income Tax Act. On this issue the finding of the ld. CIT(A) is persuaded and reproduced here in below:

6.12 Having considered entire facts of the case, and the case laws cited above, it is apparent that the appellant has completely failed to offer any explanation either before the AC during assessment proceedings or before me during appellate proceedings, despite affording sufficient number of opportunities and hence, I find no infirmity in the order of AO. Accordingly, the addition made of Rs. 86,90,500/- is confirmed. As a result, appeal is dismissed.

Apropos to the ground no. 2 of the assessee we note that the observation of the assessing officer after the reply of the assessee on specific show cause notice is as under :

In compliance to the notices issued, the AR of the assessee submitted on-line reply and furnished the copy of cash book from 09.11.2016 to 30.12.2016, GP. Comparison chart, copy of bank statement, month wise cash sales and cash deposit chart for A.Y 2017-18 and copy of VAT return only. He mentioned that interest amount of Rs. 64,379/- paid to M/s. Toyota Finance on which TDS was not deducted has been added in the computation of income.

Thus, the assessee in support of the cash deposited submitted the cash book for the period of demonetization, copy of bank statements, VAT return month wise cash sales and cash deposit

32 Girdhari Lal Meena vs. ITO chart. On this information there are no comments as to why the said information is not sufficient and correct. The bench also noted that a show cause notice dated 23.11.2019 fixing the hearing on 27.11.2019 upon which the above information was submitted by the assessee, the assessee in this notice directed nowhere to submit the books of accounts. Based on the rival arguments bench noted that it is not under dispute that the assessee is dealer of petroleum product. It is also not under dispute that these petroleum dealers were permitted to accept the demonetized currency and the extension was done for two different periods. The assessee submitted the copy of the cash book for the said period and the cash deposited into the bank account is also emanate from the sale of the petroleum product. The grievance of the revenue that the assessee failed to establish the source of the cash so deposited into the bank account with that of the availability of stock by the assessee. On this aspect of the case, we note the following submission of the ld. DR:

In this connection it is respectfully submitted that during the hearing of the said case before the Hon'ble bench, the AR of the assessee, vide his paper book dated 06.07.2023 submitted (in para 2 at page no 2 of the paper book) "that Id AO has grossly erred in contending that the appellant has not produced the stock register whereas the same was submitted vide submission letter dt. 27.11.2019". The assessee has submitted the stock register in annexure-D (page no 134 185) of the paper book dated 06.07.2023. However on perusal of the assessment

33 Girdhari Lal Meena vs. ITO order it is found that the assessing officer in his order dated 09.12.2019 has categorically mentioned (in para 4 at page no 4 of the assessment order) that the assessee has not furnished any documentary evidences like stock register etc. Therefore, the assessing officer was asked to clarify on this issue vide this office email dated 10.08.2023. In reply to the same, the assessing officer submitted the report (copy enclosed) enclosing the assessee's submission before the AO dated 27.11.2019, wherein it is clear that the assessee has submitted month wise summary of stock, not the complete day to day stock register.

Since, the assessee was not called upon to file any specific information which the assessee contended before us. Once the sales is not disputed the consequential receipt also cannot be particularly when the assessee was permitted to accept the SBN for the specific period. The ld. AR submitted that assessee maintained the day to day stock register under the essential commodity Act. That records are periodically verified by the officials under that Act. Thus, considering the prayer of the assessee for giving a chance and grievance of the revenue to verify the claim of the assessee with the relevant documentary evidence to substantiate the source of the cash deposited. As the revenue did not dispute the sales made by the assessee in the same period, but contended that no explanation regarding these cash deposit with documentary evidences like stock register, sale details, details of SBN and non SBN, purchase bills were submitted. Hence, the bench feels since the sale is not under dispute the assessee

34 Girdhari Lal Meena vs. ITO should substantiate his version with the documents that has been demanded by the revenue to establish the source of cash deposited. In the light of these discussions, we feel that let ld. AO shall verify the sales vis a vis generation of the SBN with documentary evidence as deem fit to verify the claim of the assessee. After verification of the records the ld. AO directed to allow the claim for the sale proceeds so recorded in the books supported with the proper stock records and thus even the additional evidence produced before us be also placed on record to justify the sales. Thus, the ld. AO should see that there should not be a double addition of sales viz a viz to the cash deposited, which we feel that the ld. AO should call for the details of sales made by the assessee supported by the quantitative information submitted by the assessee under the essential commodity act and based on that ld. AO directed to decide the issue. In the light of these observations ground no. 2 raised by the assessee is allowed for statistical purposes.

In the result, appeal of the assessee is allowed for statistical purpose.

Order pronounced in the open Court on 05/10/2023.