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36. In the result, ground No.1 raised by the revenue, is dismissed. ITA Nos.167 & 91/Rjt/23 (AY 17-18)

37. Ground No.2 raised by the revenue, relates to deleting the addition of Rs.5,55,66,953/-, u/s 69A of the I.T. Act, 1961, on account of unexplained cash deposit during demonetization period.

38.Succinct facts are that assessing officer noticed thatduring the course of survey carried out in the case of assessee- company on 1 st December 2016, it was found that the assessee-company, has done back dating of purchases and sales bills. The assessing officer was of the view that the assessee- company has manipulated its stock register, by back dating of purchases, thereby creating stock in the books, shown the same stock as sales during pre-demonetization period to explain the sources of cash deposited during demonetization period.The assessing officer observed that assessee- company has filed its October VAT monthly return on 22/11/2016 showing purchases at Rs.22,76,06,628/-. Thereafter, the assessee- company revised this return on 22/12/2016 i.e. after the survey action on 01.12.2016 and increased purchases by Rs.5,30,48,246/- and accordingly shown purchases at Rs.28,06,54,874/-. The assessing officerhas reproduced such VAT return in assessment order. The assessing officer has correlated such revised VAT return with acceptance of director that backdating in purchase was made. The assessing officer has also observed that before October 2016, assessee was keeping small cash balance and cash was immediately deposited in bank whereas in October 2016, assessee had huge cash balance which was deposited post announcement of demonetization. The assessing officer has observed that assessee had made cash sales of Rs.48,20,972/- on 08.11.2016 which remained un-deposited on 08.11.2016, as the assessee- company has deposited cash on 07.11.2016, before demonetization and considering reasonable cash balance of Rs.5,27,075/-, the assessing officer considered available cash balance with assessee at Rs.53,48,047/- (Rs.5,27,075/- plus Rs.48,20,972/-) and as ITA Nos.167 & 91/Rjt/23 (AY 17-18) assessee has deposited cash of Rs.6,09,15,000/- post demonetization, difference of Rs.5,55,66,953/- (Rs.6,09,15,000/- minus Rs.53,48,047/-) was treated as unexplained money u/s 69A of the Act.

41.On the other hand, Ld. Sr-Counsel for the assessee submitted that assessee has recorded sales and sales have been shown in the profit and ITA Nos.167 & 91/Rjt/23 (AY 17-18) loss account and offered to tax. Therefore, to tax the same Sales again is tantamount to double taxation. The sales made by the assessee during demonetization period has been offered for tax by way of showing in the profit and loss account. Therefore, income of assessee has suffered the tax, hence, no further addition should be made in the hands of assessee. There is noback dating of purchases and sales. The cash balance has arisen on account of cash sales and such sales was duly offered for taxation, in its profit and loss account.The assessing officer has not rejected books of account u/s 145 of the Act, even though he was of the view that there was backdating entries relating to purchases, which is also reflected in revised VAT returns filed by assessee. Therefore, learned Counsel argued that order passed by the ld. CIT(A) is a speaking order, therefore, findings of the learned CIT(A) should be upheld.

42. We have heard the Learned Counsel appearing on behalf of the respective parties at length. We find that assessing officer has made entire addition u/s.69A of the Act, on the ground that assessee has back dated the entries and part of available cash balance is unexplained money u/s 69A of the Act. The assessee in its submission has contended, before learned CIT (A) that the said cash balance has arisen on account of cash sales and such sales was duly offered for taxation in its profit and loss account. It is found that the assessing officer has not rejected books of account u/s 145 of the Act even though he was of the view that there were backdating entries relating to purchases, which is also reflected in revised VAT returns filed by assessee. The assessing officer has accepted Gross Profit, Net profit shown in books of account and purchase payment has not been doubted. The assessing officer has nowhere doubted on the genuineness on the Purchase and sales of the assessee. Once the Assessing officer has accepted book results shown by assessee, purchase, sales and stock ITA Nos.167 & 91/Rjt/23 (AY 17-18) to be correct then part of cash balance generated out of such cash balance cannot be held to be unexplained.

45.So far as backdating of purchases, as alleged by the assessing officer, it was noted that assessing officer, vide letter dated 11th December 2019 has given simplified details of back dating, shown in the table, in show-cause notice, which was reproduced by the CIT(A) on page number 58, of his order. It can be seen from referred tabular chart that out of alleged backdated purchase of Rs 3,90,05,020/-, purchases from Jyotirmaya Jewels Private Limited was Rs.3,06,42,390/-, were shown, which is more than 85% of the total alleged back dated purchases. The assessee has explained that purchase from aboveparty is of fine gold only. During the course of assessment proceedings, as well as appellate proceedings, assessee has submitted copy of purchase bill from which,it is evident that goods were purchased on 10/11/2016 i.e after demonetization and even purchase payment was made on very same date which is also reflected in bank statements submitted by assessee. The assessee has not made any cash sales out of such stock but in fact that the assessee sold fine gold on 11.11.2016 of 6000.00 GMS to Akshay Jewellers Pvt Ltd and Milan Jewellers. On 12.11.2016 it sold 1000.00 GMS to VM Jewellers and on 21.11.2016 it sold 1000 GMS to Divine Jewels, the payment for which is received by assessee by way of RTGS. If the allegation for back dated ITA Nos.167 & 91/Rjt/23 (AY 17-18) purchases is to accepted, no sales of the aforesaid quantity would have been possible. Thus, most of the alleged back dated purchase of Rs. 3,06,42,390/-, on 10/11/2016, is through RTGS and subsequent sale is also through RTGS, which has not connection with cash sales made in the month of October 2016. It is also observed that alleged backdating purchase prior to date of announcement of demonetization is significant lower amount i.e. Rs. 8,965/-, Rs.30,977/-, Rs. 28,530/-, Rs. 26,815/-, Rs. 84,588/- and Rs. 18,510/- and such lower amount of purchases cannot generate cash of more than 6 crore as alleged by the assessing officer. It is observed that assessee has available stock before the date of sale and such stock has never been disputed by assessing officer hence consequent sales cannot be doubted. It is observed that remaining alleged back dated purchases are subsequent to date of demonetization and assessing officer has not doubted genuineness of such purchases and its subsequent sale. The entire basis of addition made by assessing officer for treating part of cash balance as unexplained money is without any basis and without rejecting books of account or without doubting any purchase, sales or closing stock. He has not proved that part of purchase or sales to be bogus hence, there is no reason for not accepting explanation of assessee regarding deposit of cash out of available balance with it.