SHRI RAJ KUMAR ( M/S RADHIKA SALES CORP ), AMRITSAR vs. INCOME TAX OFFICER WARD- 3 (3), AMRITSAR

per Para 6.1 had added Rs. 27400000/- u/s 68 r.w.s 115BBE of the Act after allowing the credit of the sales made up-to October 2016 and the profit margin as worked out from the submission of the assessee. 4.1 The assessee filed its appeal and challenged the additions made by the AO. During the appeal proceedings the appellant did not file any submissions to support its grounds of appeal. As discussed above, the appellant has not complied with various notices issued in the course of appeal proceedings and also did not make any compliance during assessment proceedings. Therefore, it appears the appellant is not interested in prosecuting the appeal. In view of the above the various additions and disallowances made by the AO are upheld. The Grounds of appeal are dismissed.”

record. That the ld. A.O. had not disputed, the purchases, quantitative stock and sales for the entire period except October & November. It is pertinent to mention here that the assessee has duly submitted books of accounts, sale & purchase

register, confirmations, bank statements, expenses, parties from whom the purchase and to whom sales were made. However, the Ld. AO has alleged that the appellant has inflated sales for the month of October &November, 2016. The total

sales declared by the assessee was to be tune of Rs. 1,58,06,636/- and Rs.

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1,53,63,687/- respectively. However, the ld. Assessing Officer has computed the sales for the month of October &November 2016 at Rs. 28,06,536/- and Rs. 9,63,687/- respectively. The Ld. AO while doing such exercise has ignored the fact as to why a prudent businessman will make purchases to the tune of Rs. 3,09,69,406/- in the month of October, 2016 much before the date of demonetization in order to execute such meagre sale as computed by the AO. The assumption drawn by the AO in respect of estimating the sales is merely on assumption or presumption or surmises or conjectures. Therefore, the Ld. AO has made addition of Rs. 2,74,00,000/- in the hands of the assessee by reducing the actual sales for the month of October, & November 2016. The basis of rejection of books was not acceptable here. We respectfully relied on the order of jurisdictional High Court in the case of Ludhiana Steel Rolling Mills Ltd, supra. The Ld. AO has made such addition without discharging the burden of prove the correctness of addition. It is a settled law that once the adequate evidence/material has been provided which prima facie discharge the burden of the assessee in that case, the burden shifts on the revenue and the revenue has not discharged its onus in these circumstances. Here, no addition can be called for. In this regard, the respectfully reliance is placed on the following case laws:

I.T.A. No.195/Asr/2022 38 Assessment Year: 2017-18

• K.P. Varghese vs ITO (1981) 7 Taxman 13 (SC)

• A.S. Sivan Pillai vs. CIT (1958) 34 ITR 328 (Madras)

• Roshan Di Hatti vs CIT 107 ITR 938 (SC),

• CIT, Faridabad v. Laul Transport Corporation, [2009] 180 Taxman 185 (Punjab & Haryana)

12.1 We also considered that the amount deposited in the bank account was out of sale of various items which had been held by the assessee as stock in trade and

since the deposits in the bank account were out of sale of stock therefore the stock of the assessee has depleted and the cash has come in respect of stock, such sales had been disclosed in the trading account against the purchase which had not been

doubted, neither the opening and closing stock had been doubted. Therefore, nothing could have been doubted when the source of cash was well explained and was shown in the bank account. However the addition was made only on the basis

of surmises without establishing any motive on the part of the assessee and without disturbing the closing stock as on 31/03/2017 which had been arrived at after reducing the sale in quantity of stock in trade. 12.2 Further, in our considered view, the AO has no right to calculate sales on

hypothetical basis ignoring the evidence submitted during the course of assessment

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proceedings in the form of VAT return, purchase bills and quantitative details. Once the amount is declared as turn over cannot be called concealed income and be taxed doubly on same amount. We further relied on order of ITAT, Mumbai Jet Freight Logistics Ltd. v. Commissioner of Income-tax Appeal (NFAC). The addition U/s 68 is beyond jurisdiction of the ld. AO as the turnover is already reflected in the books of the assessee. So, the addition amount of Rs 2,74,00,000/- is quashed. 13. In the result, the appeal of the assessee bearing ITA No. 195/Asr/2022 is allowed. Order pronounced in the open court on 11.04.2023 Sd/- Sd/-

(Dr. M. L. Meena) (ANIKESH BANERJEE) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order