M/S. ARVINDBHAI KALYANBHAI TEXTILE,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-5(3)(4),, AHMEDABAD

This is an appeal filed against the order dated 18-07- 2023 passed by National Faceless Appeal Centre (NFAC), Delhi for assessment year 2017-18.

The grounds of appeal

The assessee is engaged in trading of cloth. The assessee filed return of income on 06-11-2017 declaring total income at Rs. 10,74,130/-. The return was processed u/s. 143(1) of the Act, 1961. The assessee is taxed in status of firm. Notice u/s. 143(2) was issued on 09-08-2018 and notice u/s. 142(1) was issued on 17-06-2019 along with questionnaire. In response to the above notices, the assessee filed part submissions on various occasions filed the details called for. The Assessing Officer observed that the assessee made large payment of advance tax in cash during demonetization period and has claimed refund of substantive amount later. The assessee has given its reply and after taking into account the same, the Assessing Officer made addition of Rs. 12,54,100/- as Page No. M/s. Arvindbhai Kalyanbhai Textile vs. ITO unexplained cash credit u/s. 68 of the Act and added for taxation as provided u/s. 115BBE of the Act.

Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

The ld. A.R. has filed the application for additional evidences along with the entire cash book for financial year 2016-17 and audit report and annual accounts for the financial year 2015-16. The ld. A.R. submitted that the observations of the CIT(A) that the assessee did not file any stock statement, project details was not entirely correct as the assessee has shown the relevant pages of the same including the cash sales, opening cash balance, sufficient cash and the same was in fact accepted by the Revenue during the assessment proceedings. There was sufficient evidence and therefore the additional evidences also should be admitted and in support of the earlier evidences submitted before the Assessing Officer, the addition should be deleted.

The ld. D.R. submitted that the annual cash book was not submitted and the bank accounts of three banks does not give the clear picture. The ld. D.R. objected the admission of additional evidences and submitted that the similar

Heard both the parties and perused all the relevant material available on record. The assessee has filed cash sale account till 24th June, 2016 and the statement of cash in respect of cash instead of deposit and withdrawal from each bank. The additional evidences filed before the Tribunal at the time of hearing supports the case of the assessee that the cash sales were genuinely described and therefore the cash credit of Rs. 12,54,100/- was properly explained by the assessee. Therefore, additional evidences filed before the Tribunal are admitted. The contention of the ld. D.R. that firms has lapsed does not suffice as the evidences filed before the Assessing Officer as well as CIT(A) was sufficient enough to take cognizant view regarding the explanation of cash credit and deposits during demonetization period. The additional evidence is only a supportive evidence and therefore the contention/objection by the ld. D.R. is rejected. From the perusal of the records, it can be seen that the opening balance as given to the Assessing Officer was duly recorded in audited annual accounts which was very much before the Assessing Officer as well as the bank statements and bank book of three banks i.e. HDFC, BOI, Textile Co-operative Traders Bank Ltd.

In the result, the appeal of the assessee is allowed.