AAYUSH INTERNATIONAL LTD., RAIPUR,RAIPUR V. .INCOME TAX OFFICER, WARD-2(1), RAIPUR, RAIPUR

ITA 213/RPR/2024

AI Insights

The case involves M/s. Aayush International Ltd., which appealed against the order of the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center, Delhi, which confirmed the addition of Rs.12,21,000 made by the Income Tax Officer (ITO), Raipur, as unexplained cash credit under Section 68 of the Income Tax Act, 1961. The addition was based on cash deposits made in the company's bank accounts during the demonetization period. The company argued that these deposits were from legitimate business activities and pre-existing cash reserves. The Tribunal, after reviewing the submissions and evidence, including the company's books of account and medical circumstances affecting the directors, found in favor of the company, leading to the allowance of the appeal.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 469749 (ITAT-RAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Other Referred Cases: ACIT-1(1), Bhilai Vs. Nitin Sankhala, Rahul Cold Storage Vs. ITO
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: RAVI AGRAWAL
• Keywords: Condonation of delay; Business income; Unexplained cash credit; Depreciation; Rejection of books of accounts; Unabsorbed depreciation
• Section: 144; 142(1); 68; 131; 22; 133(6); 20

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी रवीश सूद, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER आयकर अपील सं. / ITA No.213/RPR/2024 Ǔनधा[रण वष[ / Assessment Year : 2017-18 M/s. Aayush International Ltd. Plot No.724, Urla Industrial Area, Raipur-493 221 (C.G.) PAN: AABCM5829K .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer Ward-2(1), Raipur (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri Ravi Agrawal, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 18.12.2024 घोषणा कȧ तारȣख / Date of Pronouncement : 19.12.2024 2 M/s. Aayush International Ltd. Vs. ITO, Ward-2(1), Raipur ITA No. 213/RPR/2024 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee company is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 31.05.2023, which in turn arises from the order passed by the A.O under Sec. 144 of the Income- tax Act, 1961 (in short ‘the Act’) dated 24.12.2019 for the assessment year 2017-18. The assessee company has assailed the impugned order on the following grounds of appeal: “1. That on the facts and circumstances of the case and in law, the order passed by the Learned CIT(A). CIT(A) confirming the addition of Rs.12,21,000.00 made by the Learned CIT(A). ITO- 2(1), Raipur is bad in law and the impugned addition is liable to be deleted. 2. That the appellant reserves the right to add, alter or modify any ground of appeal.” 2. Shri Ravi Agrawal, Ld. Authorized Representative (for short ‘AR') for the assessee company, at the threshold of hearing of the appeal, submitted that there is a delay of 289 days involved in filing the present appeal. Elaborating on the reasons leading to the delay, the Ld. AR submitted that the same had occasioned for the reason that Shri Ashok Kumar Agrawal, director of the assessee company was suffering from a medical ailment and had undergone a kidney transplant for the second time on 29.03.2019 from KMCH, Coimbatore. The Ld. AR submitted that the entire family was 3 M/s. Aayush International Ltd. Vs. ITO, Ward-2(1), Raipur ITA No. 213/RPR/2024 disturbed due to the ill health of Shri Ashok Kumar Agrawal (supra) as his earlier kidney transplant had failed and he was to undergo another transplant. The Ld. AR submitted that as the other director of the assessee company, viz. Shri. Aayush Agrawal s/o. Shri. Ashok Kumar Agrawal, had remained engrossed in making arrangements for the treatment of his father and, thus, at the relevant point of time was unavailable in Raipur, therefore, for the said bonafide and compelling circumstances he had inadvertently omitted to carry within the prescribed time period the impugned order of the CIT(Appeals), dated 08.05.2024 in appeal before the Tribunal. The Ld. AR to fortify the aforesaid factual position had placed on record various medical certificates/reports etc. Also, the Ld. AR had drawn my attention to the application filed by the assessee seeking condonation of delay a/w an “affidavit” of Shri. Aayush Agrawal (supra) supporting the facts therein stated. 3. Dr. Priyanka Patel, Ld. Sr. Departmental Representative (for short ‘DR’) though submitted that the delay involved in filing of the present appeal was inordinate but considering the reasons leading to the impugned delay candidly did not seriously object to the request for condonation of the same by the assessee applicant. 4. I have given thoughtful consideration to the reasons leading to the delay of 289 days involved in filing of the present appeal. Although the delay 4 M/s. Aayush International Ltd. Vs. ITO, Ward-2(1), Raipur ITA No. 213/RPR/2024 of 289 days involved in filling of the present appeal is inordinate, but at the same time, considering the reason which had led to the same, I am of the view that the same had occasioned on account of bonafide reasons and compelling circumstances. I, thus, considering the aforesaid facts have no hesitation in condoning the delay of 289 days involved in filing of the present appeal. 5. Succinctly stated, the A.O observed that though the assessee company during the subject year had made cash deposits in its bank accounts but had not filed its return of income. The A.O issued notice u/s. 142(1) of the Act, dated 10.03.2018, wherein he called upon the assessee company to file its return of income for the year under consideration. As the assessee failed to comply with the aforesaid notice, therefore, the A.O issued notice u/s. 133(6) of the Act to the bank, viz. Karnataka Bank Ltd., Branch Raipur wherein the asssessee company was holding its bank accounts and had made the subject cash deposits during the year. In reply, the bank furnished the details as regards the cash deposits that were made by the assessee both during the demonetisation period as well as the period other than the demonetisation period, as under: S. No. Bank Details A/c. No. Cash deposits during demonetization period Cash deposits other than the demonetization period. 5 M/s. Aayush International Ltd. Vs. ITO, Ward-2(1), Raipur ITA No. 213/RPR/2024 1. Karnataka Bank Ltd., Raipur 6597000600024901 4,66,000 64,28,000 2. Karnataka Bank Ltd., Raipur 6592000100108401 7,30,000 45,27,500 Total 12,21,000/- 1,09,55,500/- 6. The assessee at the fag end of the assessment proceedings, submitted before the AO that the cash deposits made in its bank accounts during the subject year were sourced out of the sale proceeds of its business of manufacturing and trading of aluminium sections and that of trading of tax free goods (flour). As the assessee company had tried to substantiate the source of the cash deposits of Rs. 12.96 lacs (sic) made in its bank accounts during the year under consideration by placing on record copy of the cash book and a cash flow statement, therefore, the A.O vide his notice u/s. 142(1) of the Act, dated 02.12.2019, inter alia, directed it to produce its books of accounts, purchase bills and sale bills etc. for the year under consideration and those of the immediately two preceding years. Also, the assessee was directed to file a “Chart” showing both the cash and credit purchases and sales for each month during the year under consideration as well as of the two immediately preceding years a/w. details as regards the opening cash balance and closing cash balance. Apart from that, the assessee company was directed to produce stock register in respect of tax free goods/taxable goods for the aforementioned years. Also, the assessee 6 M/s. Aayush International Ltd. Vs. ITO, Ward-2(1), Raipur ITA No. 213/RPR/2024 company was called upon to put forth an explanation as regards the increase in its sales during the year under consideration from Rs.7.56 crore (approx.) to Rs.15.46 crore (approx.). In reply, the assessee company produced the books of accounts, bills and vouchers as well as sales register and purchase register. Also, the A.O recorded on oath the statement of Shri. Aayush Agrawal (supra) on 14.12.2019. Elaborating on the reason for not filing the return of income for the year under consideration, i.e AY 2017-18, Shri. Aayush Agrawal (supra) stated before the A.O that as his father Shri Ashok Kumar Agrawal (supra) was taken seriously unwell with chronic kidney disease and had to undergo a kidney transplant, therefore, it was for the said reason that unlike the preceding and succeeding years the return of income for the year under consideration i.e. A.Y.2017-18 had remained omitted to be filed. Apropos the source of the cash deposits made in the bank accounts of the assessee company, it was stated by him that the same was sourced from the business receipts of the assessee company i.e. receipts gathered from manufacturing and trading of aluminium sections and trading of flour. Also, the assessee company in order to dispel all doubts as regards the authenticity of its claim produced bills and vouchers before the A.O. However, the A.O observed that the bills and vouchers that were produced by the assessee were not supported by transport bilties and slips. The A.O considering the fact that the purchase bills produced by the assessee were not supported by transport bilties, loading/unloading 7 M/s. Aayush International Ltd. Vs. ITO, Ward-2(1), Raipur ITA No. 213/RPR/2024 expenses, and in all the bills only one vehicle number was mentioned throughout the year, therefore, raised doubts as regards the authenticity of the said purchase transactions. Also, it was observed by him that the assessee company had during the entire year not made any payment of purchase consideration to the supplier, viz. M/s. Ruchi Agrotech. The A.O further observed that the assessee company had raised single cash sales to the parties mostly within the range of Rs.1.90 lacs to 1.99 lacs but had failed to provide details of the said parties. Also, the A.O observed that the claim of the assessee company that it was not aware about the addresses of the purchasers to whom cash sales were made did not inspire any confidence. The A.O based on his aforesaid observations held the cash deposits of Rs.12.21 lac (sic) made during demonetization period in the bank accounts of the assessee company as unexplained cash credit u/s. 68 of the Act. Accordingly, the A.O vide his order passed u/s. 144 of the Act, dated 24.12.2019 determined the income of the assessee company at Rs.19,63,131/-. 7. Aggrieved, the assessee company carried the matter in appeal before the CIT(Appeals) but without success. As the assessee company despite having been afforded 11 opportunities had failed to participate in the proceedings before the first appellate authority, therefore, the latter was constrained to proceed with and dispose of the appeal vide an ex-parte order. 8 M/s. Aayush International Ltd. Vs. ITO, Ward-2(1), Raipur ITA No. 213/RPR/2024 Accordingly, the CIT(Appeals) finding no infirmity in the view taken by the A.O approved the same by observing as under: “5.0 Decision and Reason The statement of facts, grounds of appeal and the order appealed against have been perused. 5.1 As mentioned in the earlier para, during these appellate proceedings eleven notices have been issued to the appellant from 21.01.2021 to 15.05.2023. It is relevant to state here that once the appeal is filed by the appellant, it is obligatory on its part to co- operatively and effectively pursue the same before the appellate authority in effective and productive manner. The facts of the instant case clearly reveal that the appellant through its repetitive non- compliance has shown complete lack of interest in pursuing the appeal. The appellant did not bother to give even the basic details in support of its claim in the appeal memo. Hence, in view of the total non-compliance/non prosecution of the instant appeal on the part of the appellant, the instant appeal is adjudicated and disposed off as under, ex-party, primarily on the basis of documents/information available on records. 5.2 At the outset, in view of the facts of the instant case, this appeal is liable to be dismissed in terms of the ratio of the judgements of the Hon'ble Apex Court which has held in the case CIT v. B. N. Bhattarcharjee and Another (10 CTR 354) that an appeal means an effective appeal and that to \"prefer an appeal would mean effectively prosecuting an appeal Purposefully and constructively interpreted, preferring an appeal means more than formally filing it but effectively pursuing it and if a party retreats before the contest begins, it is as good as not having entered the fray. 5.3 It is pertinent to add here that laws assist those who are vigilant and not those who sleep over their rights. This principle is embodied in the well-known maxim \"Vigilantibus non dormientibus jura subveniunt\". It means equity comes to the aid of the vigilant and not the slumbering. In all actions, suits and other proceedings at law and in equity, the diligent and careful plaintiff is favoured and prejudicial of him who is careless. Viewed thus, it is presumed that the appellant has no further cogent reasoning or/and evidence to substantiate the 9 M/s. Aayush International Ltd. Vs. ITO, Ward-2(1), Raipur ITA No. 213/RPR/2024 grounds taken in this impugned appeal. It is trite that the onus is on person making the claim, and the primary responsibility/onus burden for proving the claim made before the tax authorities (Assessing Officers/Appellate Authorities) lies with the assessee/appellant. In the present case, the appellant has not been able to even discharge the primary onus/burden statutorily & judicially cast upon him to substantiate the claims made in the grounds of appeal in spite of adequate time and repeated opportunities given as brought out in the foregoing paras. 5.4 From the above discussion it is evident that the appellant has no evidence to substantiate the grounds taken in the instant appeal and it has not even once argued with any supporting, relevant and cogent arguments/averments in support of the grounds of appeal. Therefore, there is no option left with me but to go through the extremely brief non-speaking description appearing in the grounds of appeal, statement of facts filed by the appellant and the order appealed against. 5.5 In the instant case, during the Appellate proceedings eleven hearing notices were issued from 21.01.2021 to 15.05.2023. However, the appellant had not responded to any of the eleven notices issued during the appellate proceedings. The appellant had also not complied to the hearing notice issued on 15.05.2023 within the prescribed date of 22.05.2023. However, vide letter dated 24.05.2023, the appellant has sought for adjournment without specifying any period of adjournment for \"gathering of material from multiple sources\". In view of the consistent non- compliance of notices issued during the appellate proceedings and the fact that the request for adjournment for indeterminate period has been made after the due date of compliance of hearing notice dated 15.05.2023, the request for adjournment is hereby rejected and the instant appeal is being decided on the basis of information available on record. 5.6.1 Vide first ground of appeal the appellant has contended that the Assessing Officer has not given effect to the unabsorbed depreciation allowances as per law. In the instant case the appellant had not filed its return of income for relevant assessment year. Further, the appellant has not filed any application along with evidences of unabsorbed depreciation during the assessment proceedings. Perusal of the order appealed against 10 M/s. Aayush International Ltd. Vs. ITO, Ward-2(1), Raipur ITA No. 213/RPR/2024 reveals that, in the statement on oath recorded u/s 131 of Income Tax Act, Sh. Aayush Agrawal the director of the company has also not raised the issue of unabsorbed depreciation. 5.6.2 Further, during the course of appellate proceedings eleven hearing notices were issued but the appellant did not comply to any of the eleven notices. Thus, on account of not filing of return by the appellant, it is deemed to have not claimed the unabsorbed depreciation. The appellant has also failed to give any details of unabsorbed depreciation allowance during the assessment as well as appellate proceedings. In view of the above, and in absence of any arguments/ evidence on the part of the appellant, I have no other option left but to go along with the findings of the AO in this regard. 5.6.3 Accordingly, first ground of appeal is dismissed.” 5.7.1 Vide second ground of appeal the appellant has challenged the addition of Rs. 12,21,000/- as unexplained cash deposit during the demonetization period. In this instant case, the appellant had not filed its return of income. Later it was found that the appellant had deposited cash of Rs. 12,21,000/- in two bank accounts of Karnataka Bank during the demonetization period. During the course of assessment proceeding the appellant had contended that the cash deposited from the proceeds of cash sales of flour. When asked about the copies of purchase bills, transport bilty and transport slips the appellant had failed to provide these documents. 5.7.2 In his statement on oath recorded u/s 131 of IT Act, Shri Ashok Agrawal, Director has shown complete ignorance about the business of the company. He has also admitted that he has no purchase bills, Transport expenses bills etc. with him. Thus, during the assessment proceedings, the Assessing Officer had given ample opportunities to the appellant and on account of failure on the part of the appellant the AO had concluded that the cash deposited during demonetization period was unexplained and made addition of Rs.12,21,000/- an unexplained cash deposit. 11 M/s. Aayush International Ltd. Vs. ITO, Ward-2(1), Raipur ITA No. 213/RPR/2024 5.7.3 On the other hand, eleven hearing notices were issued to the appellant but the appellant did not comply to any of the eleven notices issued during the appellant proceedings. In view of the above and in absence of any cogent evidence/arguments from the appellant, I have no other option but to go along with the findings of the AO in the Assessment Order in respect of addition of Rs.12,21,000/- on account of unexplained cash deposit. 5.7.4 Accordingly, second ground of appeal is dismissed. 5.8 The third ground of appeal is general in nature, thus it does not need separate adjudication. 5.9 Before parting, it is trite that an appellate authority is essentially called upon to balance the two sides of an argument presented before him as held in Nirmal Singh and Others of the Hon'ble Punjab and Haryana High Court (Cr No. 3791 of 2013 (O&M) dated 01.05.2014] and in the absence of any reasonable, cogent and valid arguments/contentions advanced by the appellant in the instant appeal to counter the AO's decision as contained in the reassessment order, as mentioned earlier, the additions /disallowances made by the AO is sustained in terms of the observations herein-above. 6.0 Thus, the appeal of the appellant is dismissed.” 8. The assessee company being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before the Tribunal. 9. I have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contentions. 12 M/s. Aayush International Ltd. Vs. ITO, Ward-2(1), Raipur ITA No. 213/RPR/2024 10. Shri Ravi Agrawal, Ld. AR for the assessee company, at the threshold of hearing, submitted that the impugned addition of Rs.12.21 lacs (supra) made by the A.O u/s. 68 of the Act was based on perverse observations. The Ld.AR submitted that while for the cash deposits in made during the demonetization period in the subject bank accounts held by the assessee company with Karnataka Bank Ltd., Raipur aggregated to Rs.11.96 lacs, viz. (i) bank account No. 6597000600024901 with Karnataka Bank Ltd., Raipur: Rs.4,66,000/- and (ii) bank account No. 6592000100108401 with Karnataka Bank Ltd., Raipur: Rs.7,30,000/-, but the same was wrongly taken by the A.O at Rs.12.21 lacs. Elaborating further on his contention, the Ld. AR submitted that since inception it was the claim of the assessee company that the cash deposits of Rs.11.96 lacs (supra) in its bank accounts with Karnataka Bank Ltd. were sourced out of its business receipts, viz. (i) business of manufacturing and trading of aluminum section; and (ii) business of trading of flour. The Ld. AR submitted that the assessee company to substantiate its aforesaid claim had pursuant to the direction of the A.O produced before him its books of accounts a/w. supporting documents, viz. purchase bills, sales bills, vouchers etc., and had also filed before him a “Chart” disclosing the monthly cash/credit sales as was called for by him both for the year under consideration and that of the immediately two preceding years. The Ld. AR submitted that the A.O had not drawn any adverse inferences either as regards the books of accounts or the details filed 13 M/s. Aayush International Ltd. Vs. ITO, Ward-2(1), Raipur ITA No. 213/RPR/2024 by the assessee company before him, but had most arbitrarily without giving any cogent reason rejected its claim regarding the source of the cash deposits in its bank accounts in question. Carrying his contention further, the Ld. AR submitted that as the A.O while framing the assessment had determined /assessed the income of the assessee company by taking the “Net profit” of Rs. 7,42,131/- (as was disclosed in its audited books of account) as the base figure, therefore, he had accepted its books of accounts. The Ld. AR submitted that as the A.O had not rejected the books of accounts of the assessee company but rather had accepted the same, therefore, there was no justification on his part in rejecting the claim of the assessee company that the cash deposits made during the demonetization period in its bank accounts in question were sourced out of the accumulated savings that were available with it as on 08.11.2016 i.e before start of the demonetization period. The Ld.AR to buttress his aforesaid claim had taken me through the “cash book” (relevant extract) as of 08.11.2016, which revealed cash-in-hand of Rs.12,00,442.54 (closing balance), Page 37 of APB. It was, thus, the Ld. AR’s claim that now when the A.O had accepted the purchase and sales transactions of the assessee company, and had adopted the “Net profit” arising from the said business transaction as the base figure while determining/assessing its income for the year under consideration, therefore, it was incomprehensible as to how he could have rejected its explanation that the cash deposits of Rs.11.96 lacs (supra) in its subject 14 M/s. Aayush International Ltd. Vs. ITO, Ward-2(1), Raipur ITA No. 213/RPR/2024 bank accounts were sourced from the business transactions forming part of the same books of accounts. The Ld. AR further submitted that as both the bank accounts under consideration, viz. (i) bank account No. 6597000600024901 with Karnataka Bank Ltd., Raipur; and (ii) bank account No. 6592000100108401 with Karnataka Bank Ltd., Raipur-, formed part of the “balance sheet” of the assessee company for the year under consideration, therefore, it was difficult to fathom as to how the cash deposits made in the same could be held as having been sourced from unexplained sources. The Ld. AR to fortify his claim that now when the A.O had not rejected the books of account and in fact, had accepted the books results, therefore, there was no justification for him to have rejected the claim of the assessee company that the cash deposits in its subject bank accounts were sourced out of its business receipts, had relied on the order of the Tribunal in the cases of, viz. (i) ACIT-1(1), Bhilai Vs. Nitin Sankhala, ITA No.98/RPR/2020, dated 08.06.2023; and (ii) Rahul Cold Storage Vs. ITO, Ward-Dhamtari, ITA No.123/RPR/2022, dated 29.11.2022. 11. Per contra, Dr. Priyanka Patel, Ld. Sr. Departmental Representative (for short ‘DR’) relied on the orders of the lower authorities. 12. Admittedly, it is a matter of fact borne from record that the A.O while framing the assessment had vide his notice u/s. 142(1) of the Act, dated 02.12.2019 called for the books of accounts, purchase bills, sales bills, and 15 M/s. Aayush International Ltd. Vs. ITO, Ward-2(1), Raipur ITA No. 213/RPR/2024 vouchers etc. for the year under consideration and that of the immediately two preceding years. Also, as per the AO’s direction the assessee company had in the course of the assessment proceedings filed with him a “Chart” disclosing the cash and credit purchases/sales both for the year under consideration and that of the immediately two preceding years. Apart from that, the assessee to substantiate the authenticity of the purchase/sale transactions of tax free goods and taxable goods, had produced before the A.O the stock register. Nothing is discernible from the record which could prove that the assessee had failed to comply with the directions issued by the A.O vide notice u/s. 142(1) of the Act, dated 02.12.2019. In fact, I find that the A.O had observed in the assessment order that the assessee in compliance to his directions had produced before him books of accounts, purchase bills and vouchers a/w. purchase register. 13. As observed by me hereinabove, the A.O while framing the assessment vide his order u/s 144 of the Act, dated 24.12.2019 had not rejected the books of account of the assessee company. On the contrary, the AO by adopting the “Net profit” disclosed in the “Profit and loss account” of the assessee company as the base figure for determining/assessing its income at Rs.19,63,131/- had accepted its “books results”. As the AO had accepted the books of accounts of the assessee company, therefore, there could be no justification for him to have rejected the explanation of the assessee company that the cash deposits made during the demonetization period in 16 M/s. Aayush International Ltd. Vs. ITO, Ward-2(1), Raipur ITA No. 213/RPR/2024 his subject bank accounts were sourced from its business receipts forming part of the said books of accounts for the year under consideration. A view to the contrary would lead to incongruous result, i.e, while for the “net profit” arising from the duly accounted business transactions is accepted and brought to tax by the AO; but the said business transactions explaining the availability of cash-in-hand with the assessee as on 08.11.2016 is not to be accepted. I am unable to fathom the aforesaid self-contradictory stand of the AO. 14. As brought to my notice by the Ld. AR, the assessee company had cash-in-hand of Rs.12,00,442.54 (closing balance) available with it prior to start of the demonetization period i.e as of 08.11.2016. Considering the factum of the availability of the sufficient cash-in-hand with the assessee company as on 08.11.2016 i.e. during pre-demonetization period, there could be no justification for the A.O after accepting the “book results” of the assessee company to draw adverse inferences as regards its claim that cash deposits in its bank accounts (forming part of its books of account), viz. (i) bank account No. 6597000600024901 with Karnataka Bank Ltd., Raipur: Rs.4,66,000/- and (ii) bank account No. 6592000100108401 with Karnataka Bank Ltd., Raipur: Rs.7,30,000/-, aggregating to Rs.11.96 lacs (supra) were made out of unexplained sources. The A.O cannot be allowed to blow hot and cold at the same time, i.e., accept the book results (as disclosed by the assessee company based on its audited books of account), 17 M/s. Aayush International Ltd. Vs. ITO, Ward-2(1), Raipur ITA No. 213/RPR/2024 and at the same time, reject the duly accounted business transactions disclosed in the books of accounts which revealed that the cash deposits in the bank accounts of the assessee company were sourced out of the cash- in-hand available with it as on 08.11.2016. At this stage, I may further observe, that the fact as can be gathered from a perusal of the “cash book” of the assessee company, reveals that the availability of cash-in-hand of Rs. 12,00,442.54 as on 08.11.2016 is found to be in parity with the cash-in- hand available with the assessee both during the pre-demonetization and post-demonetization period, a fact which further dispels all doubts as regards the claim of the assessee company that the cash deposits in its bank accounts during the demonetization period was sourced from the cash-in- hand available with him as on 08.11.2016 (supra). 15. As stated by the Ld.AR, and rightly so, the issue involved in the present appeal is squarely covered by the order of the ITAT, Raipur in the case of Rahul Cold Storage Vs. ITO, Ward-Dhamtari, ITA No.123/RPR/2022, dated 29.11.2022, wherein the Tribunal after necessary deliberations had held as under: “12. Having given a thoughtful consideration to the issue in hand, I find certain peculiar facts attending to the case of the present assessee before me. As observed hereinabove, it was the claim of the assessee that the cash deposits of Rs.46.55 lacs (supra) made in its bank accounts during the demonetization period were sourced out of its business receipts, i.e., cold storage rentals that were duly recorded in its books of account. On the contrary, the A.O for the aforesaid reasons had rejected the claim of the assesee and had held the entire amount of Rs.46.55 lacs (supra) as an 18 M/s. Aayush International Ltd. Vs. ITO, Ward-2(1), Raipur ITA No. 213/RPR/2024 unexplained cash credit u/s.68 of the Act. Ostensibly, the A.O had though rejected the assessee’s claim that the cash deposit of Rs.46.55 lacs (supra) was sourced out of its business receipts, but on the other hand he had accepted its returned income, and thus without rejecting the books of account of the assessee had framed the assessment vide his order passed u/s.143(3), dated 16.12.2019. In sum and substance, the A.O though had rejected the assessee’s claim that the cash deposits of Rs.46.55 lacs (supra) were sourced out of the cold storage rental receipts for the year under consideration, but acting contrary to his aforesaid observation had at the same time accepted its book results, which, in fact, supports the assessee’s claim. On the basis of the aforesaid facts, I am unable to comprehend that now when the assessee’s explanation that the cash deposits of Rs.46.55 lac (supra) were sourced out of its duly accounted cold storage rent receipts was not accepted by the A.O, then, on what basis he had accepted its book results and framed the assessment. In case, the view taken by the A.O is approved, then the same would lead to an incongruous situation, wherein the A.O while framing assessment had rejected the assessee’s claim that the cash deposits of Rs.46.55 lacs (supra) in its duly accounted bank accounts was made out of the cash in hand as was available with it out of the cold storage rent receipts, but to the contrary, while framing the assessment had simultaneously subscribed to its claim by accepting the disclosed cold storage rent receipts out of which the cash deposits in question were claimed by the assesee to have been sourced. The A.O could not be allowed to blow hot and cold at the same time. If the assessee’s claim that the cash deposits in question were made out of its duly disclosed cold storage rent receipts was not to be accepted, then, the A.O was obligated to have rejected the books of account of the assessee, for the reason, that by not doing so he had on the one hand held the cash deposits to have been sourced out of an unexplained source, while for at the same time by accepting its books of account had accepted its claim that the cash deposits in duly accounted bank accounts were sourced out of the duly disclosed source of the assessee firm. At this stage, it may be observed that the fact that the bank accounts in question in which the cash deposits were made by the assessee during the demonetization period formed part of its books of account can safely be gathered from a perusal of the assessee’s balance sheet, Page 20 to 22 of APB. Considering the aforesaid facts, I am of a strong conviction that now when the bank accounts in question, viz.(i) A/c. No.910020017065122 with Axis Bank Ltd.; and (ii) A/c. No.13460200011173 with the Bank of Baroda had both duly been accounted for by the assessee in its books of account for the year under consideration, therefore, the A.O by not rejecting the said books of account had clearly accepted that the cash deposited by 19 M/s. Aayush International Ltd. Vs. ITO, Ward-2(1), Raipur ITA No. 213/RPR/2024 the assessee firm during the year under consideration in the said bank accounts was out of its disclosed sources. 13. Considering the aforesaid facts, I am of the view that as the treating of the cash deposit of Rs.46.55 lac (supra) as an unexplained cash credit u/s.68 of the Act by the A.O in itself militates against the acceptance of the book results of the assessee by him, therefore, there can be no justification in upholding the addition so made by him. I, thus, on the basis of my aforesaid observations vacate the addition of Rs.46.55 lac (supra) made by the A.O u/s.68 of the Act. Thus, the Ground of appeal No. 1 raised by the assessee is allowed in terms of the aforesaid observations.” 16. I, thus, in terms of my aforesaid observations, finding no justification on the part of the A.O in treating the cash deposits of Rs.12.21 lacs (supra) as unexplained cash credit u/s. 68 of the Act, vacate the same. Thus, the Ground of appeal No.1 raised by the assessee company is allowed in terms of the aforesaid observations. 17. The Ground of appeal No.2 being general in nature is dismissed as not pressed. 18. In the result, appeal filed by the assessee company is allowed in terms of the aforesaid observations. Order pronounced in open court on 19th day of December, 2024. Sd/- (रवीश सूद /RAVISH SOOD) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर/ RAIPUR ; Ǒदनांक / Dated : 19th December, 2024. **SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 20 M/s. Aayush International Ltd. Vs. ITO, Ward-2(1), Raipur ITA No. 213/RPR/2024 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "