Income Tax Appellate Tribunal - Chennai
Deputy Commissioner Of Income Tax, ... vs Ans Guptha And Sons , Salem on 27 September, 2024
आयकर अपीलीय अिधकरण, 'ए' यायपीठ, चे ई।
IN THE INCOME TAX APPELLATE TRIBUNAL
'A' BENCH: CHENNAI
ी एबी टी. वक , ाियक सद एवं
ी जगदीश, लेखा सद के सम
BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND
SHRI JAGADISH, ACCOUNTANT MEMBER
आयकर अपील सं./ITA No.1635/Chny/2024
िनधा रणवष /Assessment Year: 2017-18
The DCIT, v. M/s.ANS Gupta & Sons,
Central Circle, 184/385, Bazaar Street,
Salem. Salem-636 001.
[PAN: AAKFA 1977 G]
(अपीलाथ /Appellant) ( यथ /Respondent)
Department by : Mr.P. Krishna Kumar, JCIT
Assessee by : Mr.G. Baskar, Advocate
सुनवाईक तारीख/Date of Hearing : 11.09.2024
घोषणाक तारीख /Date of Pronouncement : 27.09.2024
आदेश / O R D E R
PER ABY T. VARKEY, JM:
This is an appeal preferred by the Revenue against the order of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi dated 17.03.2023 for the Assessment Year 2017-18.
2. At the outset, appeal filed by the Revenue is delayed by '378' days, for which, the DCIT has filed the affidavit for condonation of delay, to which, the Ld.Counsel of the assessee has not raised any serious objection. Consequently, the delay of '378' days in filing of the appeal ITA No.1635/Chny/2024 (AY 2017-18) M/s.ANS Gupta & Sons :: 2 ::
stands condoned and the appeal filed by the Revenue is taken up for hearing on merits.
3. The main grievance of the Revenue is against the action of the Ld. CIT(A) deleting the addition of ₹2,31,15,500/- u/s.69A of the Income Tax Act, 1961 (hereinafter "the Act").
4. Brief facts as noted from the materials placed before us are that the assessee is a partnership firm, which has been engaged in the business of retailing gold and other precious jewellery since a long time at Salem. The AO has noted that the assessee has filed its return of income (RoI) on 14.10.2017, declaring total income of ₹1,82,35,770/- which was processed initially u/s.143(1) of the Act and later picked up for scrutiny by issuing statutory notices; and the AO asked the assessee to file details of cash deposit in its bank account to the tune of ₹3,30,35,500/- along with supporting evidence. Pursuant to that notice, the assessee-firm had filed its reply along with supporting documents viz., Profit & Loss Account, Balance Sheet, the return of income for the earlier year ended on 31st March 2016 and explained to the AO that out of the total cash deposits of ₹3,30,35,500/-, ₹99,20,000/- represents valid currency (not SBN's) which was sale-proceeds but collected after 09.11.2016; and ₹2,31,15,500/- represents the cash on hand as on 08.11.2016 and thus pointed out that closing cash in hand as on 08.11.2016 i.e. last day prior ITA No.1635/Chny/2024 (AY 2017-18) M/s.ANS Gupta & Sons :: 3 ::
to demonetization was ₹2,32,15,890/-, which was also sale-proceeds collected before demonetization. The AO proceeded to verify the genuineness of the claim of the assessee and observed that during the relevant year, the assessee had deposited Specified Bank Notes ('SBN') to the tune of ₹2,31,15,500/- post demonetization between 09.11.2016 to 30.12.2016. And as noted, the AO gathered from assessee that source of cash deposits were the proceeds received from cash sales of gold and precious jewellery in the first week of November 2016 [i.e. 01st November to 8th November, 2016 i.e. prior to demonetization]. The AO, however, is noted to have doubted the explanation furnished by the assessee on the reasons discussed (infra).
5. The AO observed that assessee's monthly sales never exceeded on an average of ₹3.5 Crs. monthly from April to September, 2016.
However, in the month of October, 2016, the assessee has declared cash sales of ₹5,77,90,923/-; and in the month of November, 2016 [i.e. between 01.11.2016 to 08.11.2016], the assessee had shown cash sales of ₹2,89,25,699/- (as per the assessee's own statement). This amount of ₹2,89,25,699/- according to the AO, was 82% of the average monthly sale (i.e. ₹3.5 Cr. as noted by the AO supra) collected within a short- period of eight (8) days or 1/3rd of a month (i.e. first week of November), which claim according to the AO was unbelievable. Further, according to the AO, the assessee had a habit of depositing 95-98% of the regular ITA No.1635/Chny/2024 (AY 2017-18) M/s.ANS Gupta & Sons :: 4 ::
cash sales in the bank account immediately after receiving the same; and the cash holding capacity was very less from the month of April, 2016 to October, 2016. Thus, he found it suspicious that assessee for the period from 01.11.2016 to 08.11.2016 had a closing cash in hand to the tune of ₹2,32,15,890/-, [when compared with the corresponding figure in the preceding year i.e. AY 2016-17, ₹86,95,775/- only]. Further according to the AO, the opening cash in hand of the assesse as on 01.11.2016 was ₹59,68,607/- and the cash sales made during the period from 01.11.2016 to 08.11.2016 was ₹2,89,25,699/- and even after depositing cash of ₹1,89,50,000/- in the bank [between on 01.11.2016 and on 08.11.2016], the cash balance was ₹2,32,15,890/- as on 08.11.2016 which raises the question of credibility of the assessee's claim that the cash deposited in Specified Bank Notes (SBNs) during the demonetization period was out of the accumulated cash balance before demonetization was declared and effective from 08.11.2016 12 PM onwards. According to the AO, even if it is assumed that the assessee was able to sell gold and other precious jewellery from 8 PM to 12 PM on 08.11.2016 to the tune of ₹2,89,25,699/-, the said claim also can't be believed, because, assessee couldn't submit the proof of CCTV footage to prove that there was huge rush in their showroom. Further, according to the AO, assessee has not deducted any TCS on sale of jewellery of more than ₹2 lakhs in cash and sale of bullion as required u/s.206C(1D) of the Act. Thus, according to ITA No.1635/Chny/2024 (AY 2017-18) M/s.ANS Gupta & Sons :: 5 ::
the AO, the SBNs deposited to the tune of ₹2,31,15,500/- was either the assessee's unaccounted money which have been introduced and accommodated in the name of bogus customers' or it may be somebody's unaccounted money which have been introduced and accommodated under bogus customer's names during the period of demonetization for commission basis. Therefore, according to the AO, sec.69A of the Act is attracted on the SBNs deposited during demonetization period. Further according to the AO, the assessee was prohibited from transacting in the SBNs during demonetization period from 09.11.2016 to 31.12.2016 and therefore, assessee's action of depositing the cash in its bank-account after 09.11.2016 can't be accepted and against law and therefore, he added ₹2,31,15,500/- u/s.69A of the Act.
6. Aggrieved, the assessee preferred an appeal before the Ld.CIT(A)/NFAC and pointed out to him that the assessee had filed the relevant documents to prove the nature & source of cash / SBNs deposited where proceeds received from cash sales of gold and precious jewellery in the first week of November, 2016 (i.e. from 01.11.2016 to 08.11.2016 before declaration of demonetization).
7. The assessee brought to the notice of the Ld.CIT(A) that assessee-
firm maintains regular Books of account and the same was audited by an independent Auditor. And that the assessee was subjected to Tax Audit ITA No.1635/Chny/2024 (AY 2017-18) M/s.ANS Gupta & Sons :: 6 ::
under the provisions of Section 44AB of the Act which require detailed information to be filed in terms of Quantitative and Turnover information of Stock manufactured/traded. And that the cash sales and the corresponding cash deposits in banks were reflected in the books of the assessee in the respective years. And it was pointed out that the audited financial statements form part of the regular returns filed by the assessee. And the assessee being a retailer, cash sales have to be and are effected and transacted in the books of account maintained in the ordinary course of day-to-day business. The entries pertaining to cash sales and corresponding cash deposits in banks were duly reflected in the books of account. And that the details and the tax audit report for the impugned F.Y. 2016-17 [AY 2017-18] was also filed before the AO in course of the assessment proceedings and the sale for the other periods was accepted by the department. Sales shown by the assessee are fully backed with the sale bills, duly recorded in books of account and also in the stock register while on the other hand the DCIT/AO has not brought any material on record to establish that these sales are bogus. And that assessee was having the sufficient stock to make the sales and that the AO has not brought any material on record to establish that the sale bills were bogus or any evidence indicating that such sales were bogus. And pointed out to the Ld.CIT(A) that books of the assessee were not rejected by the AO and on the contrary, the AO has accepted the books of the ITA No.1635/Chny/2024 (AY 2017-18) M/s.ANS Gupta & Sons :: 7 ::
assesse showing total sales of ₹103,06,83,195/- and accepted the gross profit of ₹10,82,51,121/- (GP @10.50%) which fact is evident from the AO starting the computation of total income by accepting the returned income shown by the assesse to the tune of ₹1,82,35,770/- which included impugned amount of ₹2,31,15,500/- (which was claimed to be sale proceeds from sale of jewellery prior to demonetization and cash-in- hand which was later deposited during demonetization period due to heavy rush in banks in the first week of demonetization). In such a back- ground, the assessee submitted that the impugned action of the AO tantamounts to double taxation since the AO having accepted the returned income couldn't have made separate addition of the SBNs deposited which were nothing but sale-proceeds which were part of the sales turnover accepted by the AO (i.e. ₹103,06,83,195/-).
8. The assessee further brought to the notice of the Ld.CIT(A) an important fact that the Commercial Taxes Department had accepted the sales of the assessee which was declared by it in its VAT returns as genuine. Therefore, it was cited by the assessee that there remains no reason to doubt the genuineness of part of such sales to the tune of ₹2,31,15,500/-
9. It was further asserted that it was not mandatory under the Act to collect the information related to purchase of gold jewellery below ₹2 ITA No.1635/Chny/2024 (AY 2017-18) M/s.ANS Gupta & Sons :: 8 ::
lakhs i.e. full name, address or / and PAN of the customer to whom goods were sold in cash during the course of business below to the prescribed limit. Further, it was pointed out that in the preceding financial year, the same practice was followed by the assessee i.e. details of name, address and PAN of all customers were not fully available with the assessee when the sales were below the threshold limit as discussed supra and that in the preceding year, the cash sales made by the assessee were fully accepted by the AO while completing the assessment proceeding u/s.153A r.w.s. 143(3) of the Act. And that the cash sales of the previous months, previous years and next month or years were also made on the same trend with same set of particulars. Therefore, only the sales made and utilized for depositing the demonetized currency cannot be doubted for this reason and more particularly when the fact remain that sales in question which yielded the cash were transaction before the Government declared ₹500/- & ₹1000/- as illegal tender ( i.e. from 09.11.2016 to 31.12.2016).
10. Thus, according to the assessee, transactions can't be treated as non-genuine for want of the details which are not required to obtained and kept as per the law in force during that period and relied on the decision of the Hon'ble High Court of Bombay in the case of R.B. Jessaram Fatehchand (Sugar Dept.) Va Commissioner of Income Tax [1970] 75 ITR 33 (Bombay).ITA No.1635/Chny/2024 (AY 2017-18)
M/s.ANS Gupta & Sons :: 9 ::
11. And the assessee assailed the action of the AO to treat the cash/SBNs deposited, in the banks during the demonetization period in demonetized currency as unexplained money u/s.69A of the Act although the nature and source of the cash deposits being proceeds arising out of cash sales etc. is patently evident from the entries in the audited books of account of the Assessee: And it was pointed out to Ld.CIT(A) that it is not the case of the Department that the cash deposited in the banks during the demonetization period was in excess of what was available in the cash books. And the fact that the cash deposits in banks were sourced out of cash sales is evident from the entries in the cash books. And the books of account of the assessee have been audited by an independent auditor.
And the cash sales & receipts are duly supported by relevant bills. And the fact that cash sales and corresponding cash deposits in banks have been regular feature of the assessee's business over the past several years has not been denied by the AO. Thus, according to the assessee, there is no reason why similar modus-operandi, which continued in the current FY 2016-17 (AY 2017-18) should not be accepted by the AO and rejected on mere surmises and conjectures.
12. The Ld.CIT(A) after considering the aforesaid relevant facts has returned a finding of fact that the assessee has established the sales with the bills and which correspondingly represents outgo of stocks. And found that the sales were duly accounted for in the books of accounts and there ITA No.1635/Chny/2024 (AY 2017-18) M/s.ANS Gupta & Sons :: 10 ::
were no abnormal profits. Therefore, according to the Ld.CIT(A), he didn't find any reason to suspect the sales merely because of some routine observation of suspicious nature such as, non availability of KYC documents for sales, non-availability of CCTV footage for huge rush of public etc. The Ld.CIT(A) accepted the explanation of the assessee that due to festive season the public thronged the jewellery shops and purchased the jewellery; and he was of the opinion that in the present case also the cash deposited post demonetization by the assessee was out of cash sales which had been accepted by the Sales Tax/VAT Department and which fact has not been doubted by the AO. Moreover, there was sufficient stock available with the assessee to make cash sales and there was festive season in the month of October 2016 prior to the making of cash deposit in bank account out of the sales. According to the Ld.CIT(A), the impugned addition/deposits have been made by the assessee from the cash balance available in the books of accounts, which were duly generated on sale of goods out of stock available with the assessee, the Ld.CIT(A) observed that it is not the case of the AO that the purchases of stock made by the assessee and entered in the stock register were not genuine. So he followed judicial precedents/ratios of the various Hon'ble High Courts and the coordinate benches of ITAT, and was of the view that the addition made by the AO to the tune of ₹2,31,15,500/- was not justified.ITA No.1635/Chny/2024 (AY 2017-18)
M/s.ANS Gupta & Sons :: 11 ::
13. The Ld.CIT(A) also found that the reliance placed by the AO on various decisions in his Assessment Order were not applicable to the facts of the case and instead found the two decisions cited by the AO were in fact in Assessee's favor namely-
i) A. Rajendran & Ors. vs. ACIT-204 CTR 9 (Mad) and
ii) ACIT Vs. Sampat Raj Ranka-73 TTJ 642 (Jodhpur).
14. The Ld.CIT(A) found that the reasoning given by the AO are not supported by any reliable evidence but driven by mere suspicion and conjectures. And the Ld.CIT(A) took note of the unique circumstance of announcement of demonetization of higher denominated notes (₹500/- & ₹1000/-) on 8th November 2016 and consequent huge cash sales made by the assessee during the first week of November 2016 (prior to demonetization) and deposit of that cash in bank was found to be satisfactorily explained by the assessee. And he held that there was no abnormality in the same and thus, accepted explanation of the assessee about the source of sale-proceeds/SBNs and admitted the same as revenue receipt, especially when the deposits have been routed through the regular books of account of the assessee. And the Ld.CIT(A) took note of the fact that books of account have not been rejected and the AO has accepted the sales as well as purchases and also the expenses claimed by the assessee and has only found fault with the quantum of cash deposits during the demonetization period which was repelled by the Ld.CIT(A). ITA No.1635/Chny/2024 (AY 2017-18)
M/s.ANS Gupta & Sons :: 12 ::
Considering the aforesaid facts, he was of the considered view that treating the cash deposit of ₹2.15.50,000/- [typographical mistake, whereas correct figure was ₹2,31,15,500/-] (supra) as an unexplained cash credit u/s.68 [it was u/s.69A] of the Act by the AO in itself militates against the acceptance of the book results of the assessee by the AO. Therefore, the Ld.CIT(A) held that there can be no justification in upholding the addition so made by him. He thus on the basis of his aforesaid observations was pleased to delete the addition of ₹2,15,50,000/- [₹2,31,15,500/-] (supra) made by the AO u/s.68 (u/s.69A) of the Act.
15. Aggrieved by this order of the Ld.CIT(A), the Revenue has preferred this appeal before the Tribunal assailing the impugned action of the Ld.CIT(A).
16. We have heard both the parties and perused the material placed before us. The admitted and uncontroverted facts before us is that the assessee firm is engaged in the business of retail trading of gold and jewellery. During the relevant year, the assessee had achieved sales turnover in this business of ₹103,06,83,195/- (refer Page No.5 of the Paper Book) which inter-alia comprised of receipts of ₹2,31,15,500/- which proceeds were deposited during the demonetization period but was the closing cash-in-hand prior to declaration of demonetization [i.e. as on ITA No.1635/Chny/2024 (AY 2017-18) M/s.ANS Gupta & Sons :: 13 ::
08th November, 2011]. These sales are found recorded in the sales register, stock register, cashbook etc. The impugned sum [₹2,31,15,500/- ] also formed part of the overall sales credited in the P&L A/c and offered for taxation under the 'Business Income'. It is noted from Page No.50 of the Paper Book that the assessee has tabulated the stock movement details along with details of sales and it is not in dispute that the movement of stock fully reconciles with the reported sale proceeds which were later on deposited during the demonetization period. It is also noted that the assessee had credited the sale proceeds to its Profit & Loss Account and offered the same to tax. The AO is however noted to have only casted aspersions on the sales to the tune of A.Y. 2017-18 ₹2,31,15,500/- made by the assessee, but at the same time, he is noted to have accepted the entire sales of ₹103,06,83,195/- and also the gross- profits derived there from i.e. ₹10,82,51,121/- (Gross profit approx @ 10.50%) which fact is evident from the AO starting the computation of total income by accepting the returned income shown by the assessee to the tune of ₹1,82,35,770/- which included the SBNs of ₹2,31,15,500/-.
We thus concur with the finding of the Ld.CIT(A) that, the AO having accepted the book results and without rejecting the books erred in suspecting the proceeds which were deposited during the demonetization period without any basis/material was not tenable in law. ITA No.1635/Chny/2024 (AY 2017-18)
M/s.ANS Gupta & Sons :: 14 ::
17. As noted above, the AO had doubted the cash sales during the period between 01.11.2016 to 08.11.2016 (first week of November, 2016) i.e. before demonetization in comparison to the preceding year and i.e. closing cash in hand on 08.11.2016 was ₹2,32,15,890/- whereas on 08.11.2015 was only ₹86,96,775/-, therefore, he inferred that the sales made during the First week of November, 2016 was not genuine. Before us, the Ld. AR countered the same and pointed out that the AO himself had taken note of the fact that, the total cash sales (including VAT) for FY 2015-16 (AY 2016-17) was ₹60,74,87,574/-, & total cash sales from 01.04.2015 to 08.11.2015 was ₹40,31,18,425/- whereas in the relevant year FY 2016-17 (AY 2017-18), he pointed out that there was in fact decrease in total cash sales (including VAT) ₹40,79,32,220/- and total cash sale (including VAT) from 01.04.2016 to 08.11.2016 was only ₹29,48,11,165/- as evident from Page No.7 of the AO's order. Therefore, the Ld AR asserted that in AY 2017-18, there was decrease in total cash sale as well as cash sales in first week of November when compared with earlier year. Therefore, the cash sales can't be doubted in any case. The Ld. AR pointed out that, the AO had neither made out a case that the stock which was sold either in the month of October 2016 or in the first week of November, 2016 i.e. up to 08.11.2016 was actually not available with the assessee nor that the stock movement as per the books of accounts suffered from any discrepancy. The Ld. AR also showed ITA No.1635/Chny/2024 (AY 2017-18) M/s.ANS Gupta & Sons :: 15 ::
us that the assessee had opening stock as on 01.04.2016 to the tune of ₹54,08,99,380/- (Gold worth ₹51,31,67,010/-) and had made purchases in the current year to the tune of ₹89,52,42,090/- (including gold worth ₹86,09,28,191/-) as against the sales achieved during the year to the tune of ₹103,06,83,195/- (including gold worth ₹98,75,60,421/-) and genuineness of these purchases or sales were also not in doubt. According to him therefore, when the stock movement and purchases had been accepted by the AO, it was not justified on the AO's part to disbelieve the sale merely on surmises and conjecture. And also pointed out that Diwali was on 31st October, 2016 and due to festival season in October/first week of November, over the counter sales cannot be doubted. Having considered the foregoing, we hold these reasons cited by the AO were not tenable.
18. Before us, the Ld. DR for the Revenue, however emphasized on the AO's findings that the details of sales i.e., the name and complete address of the customers were not provided by the assessee and therefore according to him, the AO had rightly disbelieved the genuineness of the sales to the extent of ₹2,31,15,500/- . Per contra, the Ld. AR pointed out that the appellant had not furnished such details in relation to its entire sales of ₹103.06 Cr. and still the AO accepted the total turnover; and therefore the AO's action of selectively picking, choosing and disbelieving only those sales whose proceeds were deposited during the ITA No.1635/Chny/2024 (AY 2017-18) M/s.ANS Gupta & Sons :: 16 ::
demonetization period was whimsical/arbitrary and tantamounts to double addition. The Ld. AR reiterated that, the assessee firm was engaged in retail trading of gold and precious jewellery and therefore by its very nature of retail trade, the sales were made to flying customers over-the- counter for which cash memos/sale bills were issued, for which complete details of customers were not required to be taken, as none of these over-the-counter sales were on credit. He further brought to our notice that, Rule 114B of the Income Tax Rules, 1962 also required obtaining the PAN of only those customers to whom sales per transaction exceeded Rs.2,00,000/-. It is noted that similar limit had been set out in Rule 114E of the Income Tax Rules, 1962. The Ld. AR showed us that, the sale made by the assessee firm did not exceed ₹2,00,000/- per customer and therefore it was not required to maintain the relevant KYC details of such customers to whom sales were made, in law. According to him therefore, when the assessee-firm was not required to maintain such details of customers under the law, the Revenue was unjustified in calling for the same and thereafter drawing adverse inference for want of the same. He further pointed out the fact that the AO did not require such details in relation to the sales of ₹103.06 Cr. [total sales turnover] substantiates the case of the assessee that, it was not required to maintain and provide the full details of customers to whom sales made were less than ₹2,00,000/-. Having considered these relevant facts and the position of ITA No.1635/Chny/2024 (AY 2017-18) M/s.ANS Gupta & Sons :: 17 ::
law, particularly Rule 114B & 114E, prevailing in that year, we are unable to countenance this contention of the Ld. DR for disbelieving the sales. For this, we may gainfully refer to the following observations made by the Vishakhapatnam Tribunal in the case of ACIT Vs Hirapanna Jewellers (128 taxmann.com 291) wherein sales made to 270 different customers was held to be plausible by observing as follows:-
"7.2 In the instant case the assessee has established the sales with the bills and representing outgo of stocks. The sales were duly accounted for in the books of accounts and there were no abnormal profits. In spite of conducting the survey the AO did not find any defects in sales and the stock. Therefore, we do not find any reason to suspect the sales merely because of some routine observation of suspicious nature such as making sales of 270 bills in the span of 4 hours, non availability of KYC documents for sales, non writing of tag of the jewellery to the sale bills, nonParam Gold, Mumbai vs The Income Tax Officer Ward 42(1)(4), ...
on 16 January, 2024 Indian Kanoon - http://indiankanoon.org/doc/197178342/ 3 A.Y. 2017-18 Param Gold availability of CCTV footage for huge rush of public etc. The contention of the assessee that due to demonetization, the public became panic and the cash available with them in old denomination notes becomes illegal from 9-11-2016 and made the investment in jewellery, thereby thronged the jewellery shops appear to be reasonable and supported by the newspaper clippings such as The Tribune, The Hindu etc. It is observed from the newspaper clippings that there was undue rush in various jewellery shops immediately after announcement of demonetization through the country."
19. The next reason given by the AO to disbelief the sales was that assessee in earlier year (AY 2016-17) didn't hold cash for long period and had been depositing the same in bank. We don't agree with such obervation and note that in earlier year up to 08.11.2015 cash sales was to the tune of ₹40,31,18,425/- and assessee deposited in bank ₹40,58,00,000/- and cash-in-hand from April, 2015 was approx. ₹37.40 lakhs (monthly), whereas in the year under consideration i.e. AY 2017-18, assessee had cash sales of only ₹29,48,11,165/- [from 01.04.2016 to 08.11.2016] and deposited in bank ₹24,53,60,000/-and approx cash in ITA No.1635/Chny/2024 (AY 2017-18) M/s.ANS Gupta & Sons :: 18 ::
hand mostly was only to the tune of ₹46.49 lakhs, whereas increase in holding cash-in-hand in the first week of November was due to heavy rush of customers to buy the jewellery due to Diwali, etc., and assessee couldn't depute staff to deposit the same and could only deposit during that time ₹1,89,50,000/- (whereas in earlier year i.e. November till 08.11.2015 during this period assessee deposited ₹1,55,00,000/- and held cash-in-hand to the tune of ₹85,95,775/-) therefore, closing cash in hand of ₹2,38,15,890/- can't be disbelieved considering the manifold increase in total turnover of ₹103.06 Cr this year. Therefore, we don't find any merit in this contention of the AO and is of the opinion that nothing turns over it. Thus, we find this reason was also irrelevant and misplaced on the given facts of the present case, particularly to make the impugned addition u/s.69A of the Act. Sec.69A of the Act is not attracted because the impugned addition was sale proceeds pertaining to period prior to 8th November, 2016 as has been recorded in the books which results has been accepted by the AO and merely on surmises and conjectures, addition made can't be sustained. In this regard, we further note that the burden casted upon the assessee u/s.69A of the Act, is to substantiate the nature and source of credits of ₹2,31,15,500/- found recorded in the books of accounts, and the amount has been explained both to the AO & the Ld.CIT(A) and before us that the source of credit entries in the cash-book was the proceeds received from sales, which in ITA No.1635/Chny/2024 (AY 2017-18) M/s.ANS Gupta & Sons :: 19 ::
turn was deposited into the bank account and the same was reflected by way of debit entries in the cashbook. As noted by us above, the stock movement as well as the purchases made by the assessee-firm are not in doubt. It is not the case of the Revenue that the assessee did not hold the stock in its books at the end of September 2016, out of which sales were made in the month of October and especially that during first week of November, 2016 to the tune of ₹2,31,15,500/-. Also, the corresponding purchases out of which these sales were made have not been doubted or questioned by the AO. And no adverse material were pointed out by the AO for disbelieving the sales and the cashbook. Thus we find that the AO had not pointed out any defect or infirmity in the cash sales made during first week of November, 2016 i.e. up to 08.11.2016 vis-a-vis that of stock movement as well as the cashbook etc. The Ld. DR was also unable to bring anything contrary on record to controvert these facts found by the Ld.CIT(A). Having regard to the foregoing therefore, we find merit in the findings of the Ld.CIT(A) that the nature and source of cash recorded by way of credit entries in the cash book, which in turn was deposited into the bank account, had been explained in as much as the source comprised of the sale proceeds of gold and precious jewellery. On these specific facts therefore, according to us, the averments made by the AO to disbelieve the genuineness can't be sufficient reason to disbelieve the nature and source of cash recorded by way of credit entries in the ITA No.1635/Chny/2024 (AY 2017-18) M/s.ANS Gupta & Sons :: 20 ::
cashbook, as the same had indeed been explained by the assessee and no adverse material has been brought on record by the AO to support his impugned action of addition of ₹2,31,15,500/-.
20. In view of the above facts therefore, according to us, the sale proceeds of ₹2,31,15,500/- which were deposited during demonetization period and offered by way of revenue receipts from 'Business' by the assessee-firm, is found to be explained and therefore we hold that the Ld.CIT(A) was justified in deleting the addition made by the AO assessing these sale proceeds as unexplained investment u/s.69 of the Act.
Accordingly, we uphold the action of the Ld.CIT(A) deleing the addition of ₹2,31,15,500/- made u/s.69 of the Act and the grounds of appeal raised by the Revenue stands dismissed.
21. In the result, appeal filed by the Revenue is dismissed.
Order pronounced on the 27th day of September, 2024, in Chennai.
Sd/- Sd/-
(जगदीश) (एबी टी. वक )
(JAGADISH) (ABY T. VARKEY)
लेखा सद /ACCOUNTANT MEMBER याियक सद य/JUDICIAL MEMBER
चे ई/Chennai,
!दनांक/Dated: 27th September, 2024.
TLN, Sr.PS
ITA No.1635/Chny/2024 (AY 2017-18)
M/s.ANS Gupta & Sons
:: 21 ::
आदेश क ितिलिप अ$ेिषत/Copy to:
1. अपीलाथ /Appellant
2. थ /Respondent
3. आयकरआयु /CIT, Chennai / Madurai / Salem / Coimbatore.
4. िवभागीय ितिनिध/DR
5. गाडफाईल/GF