AI Insights
The case involves an appeal by the revenue against the order of the CIT(A) which had deleted the additions made by the Assessing Officer (AO) concerning cash deposits and sales of gift vouchers by Suronik Overseas Pvt. Ltd. The AO had added these amounts to the income of the assessee under sections 69A and 115BBE, suspecting them to be undisclosed income. The CIT(A) reversed this decision, leading to the revenue's appeal. The Tribunal examined the evidence presented, including bank statements, invoices, and other documents, and found that the assessee had sufficiently explained the sources of the cash and the nature of the voucher sales.
Appeal details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 299491 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 month(s) 26 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
19-07-2023
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
G
Next Hearing Date
11-06-2023
Assessment Year
2017-2018
Appeal Filed On
23-03-2023
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE, SHRI AMARJIT SINGH, ACCOUNTANT MEMBER & SHRI SANDIP SINGH KARHAIL, JUDICIAL MEMBER ITA No. 940/MUM/2023 (A.Y. 2017-18) DCIT 5 (3)(1) Room No. 573, Aayakar Bhavan, Mumbai 400020 Vs. Suronik Overseas Pvt. Ltd. Shop No. 7, Purshottam Building, Tribhuvan Road, Lamington Road, Mumbai-400004 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAACS6108C Appellant .. Respondent Appellant by : Shri Rashmikant C. Modi & Ms. Ketaki Rajeshirke, AR Respondent by : Shri Anil Kumar Das, DR Date of Hearing 12.06.2023 Date of Pronouncement 20.07.2023 आदेश / O R D E R PER AMARJIT SINGH :- The present appeal filed by the revenue is directed against the order passed by the National Faceless Appeal Centre (NFAC), Delhi dated 24.01.2023 for A.Y. 2017-18. The revenue has raised the following grounds before us: “1."Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is right in deleting the addition of cash deposits in the bank account without appreciating the findings of the AO that despite ample opportunities the assessee has failed to prove the source of the cash deposits." P a g e | 2 ITA No. 940/MUM/2023 AY. 2017-18 DCIT Vs SURONIK OVERSEAS PVT LTD 2."Whether on the facts and circumstances of the case and in law, the Ld. CIT(A)is right to justify while rejecting the findings of the Assessing Officer that the assessee has manipulated its books of accounts to bring in cash in hand." 3."Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is right in deleting the addition made of Rs. 1,16,79,861/- (Rs. 41,63,060/- + Rs. 75,16,801/-) u/s 69A taxable u/s 115BBE of the Act ignoring that the assessee has not properly explained the source of cash deposit. 4."Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in ignoring the facts that burden of proof lies upon the assessee u/s 69A for its existence and genuineness." 5."Whether on the facts and circumstances of the case and in law, the Id. CIT(A) was correct in ignoring the evidence that was not brought on record on issuance of Notice u/s 133(6) of the Income Tax Act, 1961." 6 "Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is right in ignoring the fact that the assessee failed to prove that why the amount which was outstanding for so long was suddenly paid by the party and further the assessee has submitted two different kinds of ledger which is nothing but the technique used by the assessee to provide back entry of cash"” 2. The assessee company was engaged in the business of trading in electronics and also in the trade of dry fruits etc. During the course of assessment the AO noticed that assessee has shown cash received from CNS InfoTech to the amount of ₹41,63,069/-and have also shown cash sale of gift vouchers to the amount of ₹75,16,801/-. In this regard the AO asked the assessee to explain the source of cash deposited and also sale of gifts vouchers. P a g e | 3 ITA No. 940/MUM/2023 AY. 2017-18 DCIT Vs SURONIK OVERSEAS PVT LTD 3.1 The assessee submitted that it has received an amount of ₹41,63,060/- from one of the sundry debtors M/s CNS InfoTech proprietor Mr. Nilesh Dattaram Suplade. The assessee further explained that the first aforesaid party had issued cheques which were dishonoured by the bank. He had made the payment in cash to avoid any criminal case to be filed against him for dishonour of cheque under the Negotiable Instrument Act. The assesse also submitted that the said party expired on 18.03.2016. The aforesaid party has made the payment in cash which was due from the said party under the head sundry debtor. 3.2 Regarding sale of gift vouchers assessee explained that it had received gift vouchers from its vendors as incentives in earlier years. The gift vouchers was shown as stock in the Balance Sheet of the earlier year. The assessee sold the gift vouchers and the encasement of incentive had increased the profit of the assessee substantially during the year. 3.3 However, the AO has not agreed with the submission of the assessee. The AO stated that Assessee has not furnished the details such as PAN and address of the parties to whom the gift vouchers were sold. Regarding cash received from the CNS InfoTech, the same could not be verified since the aforesaid party has not responded to the notice issued u/s 133(6) of the Act. The AO was of the view that Assessee has manipulated its books of account to bring cash in hand, the AO also stated that assessee has chosen techniques to provide back entry of cash received of amount of Rs.41,63,060/- from CNS InfoTech in its book. Therefore, the AO has added amount of Rs 1,21,18,000/- u/s 69 of the Act to the total income of the assessee. 4. Aggrieved assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A) has allowed the appeal of the assessee. P a g e | 4 ITA No. 940/MUM/2023 AY. 2017-18 DCIT Vs SURONIK OVERSEAS PVT LTD 5. During the course of appellate proceedings before us, the Ld. Departmental Representative referred Para No. 5 of the assessment order and contended that sale of gift voucher was not part of the business of the assessee and regarding receiving of cash amount from the sundry debtors, the Ld. Counsel submitted that assessee has failed to explain why amount was not received by cheques and supported the order of the AO. 6. On the other hand, Ld. Counsel submitted that cash received from the sundry debtors was part of sale of earlier year. In this regard, the Ld. Counsel referred page no. 78 of the paper book showing the detail of sale invoices made in the earlier year as part of sale to the amount of ₹41,63,060/-. The Ld. Counsel further submitted that sundry debtors has failed to make payment since cheques given by them as enclosed at page no. 86 to 88 of paper book were dishonoured. The assessee has informed him that a case will be filed against him in the criminal court under Negotiable Instrument Act. Therefore, the said party has immediately made payment in cash and that party expired on 18.04.2016. The Ld. Counsel has also referred page no 80 of the paper book showing the description of sale made to the sundry debtors M/s CNS InfoTech and remaining amount outstanding from the said party on different date during the year under consideration. Regarding receiving gift vouchers, the Ld. Counsel referred page no. 64 to 75 of the paper book showing stock summery of gift vouchers of Tanishq for the period of 29.04.2016 to 13.03.2017 along with copies of tax invoices issued and charging of VAT to the different buyers. The Ld. Counsel has also referred notes no.16 of financial statement for the year ended 31.03.2014 showing revenue under the head discount, incentive and rounded off of to the amount of ₹3404000/-and also referred inventories as on 31.03.2014 showing the stock of gift vouchers to the amount of P a g e | 5 ITA No. 940/MUM/2023 AY. 2017-18 DCIT Vs SURONIK OVERSEAS PVT LTD ₹76,07,000/- as per Notes 12 to financial statement for the period ending 31.3.2017. The Ld. Counsel also referred copies of delivery challans receiving of Tanishq gift vouchers along with copies of shipments receipt of Blue Dart received from Dell India Pvt. Ltd. Banglore alonwith Delivery Challan & Declaration Letter showing description, quantity, unit value and total value of the items received. 7. Heard both the sides and perused the material on record. 7.1 We have also perused the decision of Ld. CIT(A) wherein he has deleted impugned addition. The relevant part of the decision of the Ld. CIT(A) is reproduced as under: 7.7 Finding on GOA No. 1:- Addition of Rs.41,63,060/- u/s. 69A of the Act: a) Appellant supplied goods and services to M/s. CNS Infotech prop Nilesh D Saplade since December 2013. Address of this party is 16A, Aristocrate building. Lajya Compound, Mogra Lane, Old Nagardas Road, Andheri (East), Mumbai -62. Appellant has bank account with IOB wherein the transactions with M/s. CNS Infotech are reflected since December 2013. This shows that appellant had a genuine and old business relation with M/s. CNS Infotech. In FY 2014-15, the appellant entered into transaction with M/s. CNS Infotech for Rs.41,63,069/- and copy of confirmation letter from M/s. CNS Infotech for FY 2014-15 was filed. The said party issued following cheques to appellant in FY 2014- 15 and 2015-16 to tune of Rs.41,90,000/- but same were dishonoured in appellants bank account due to insufficient funds in bank account of M/s. CNS Infotech. Copies of dishonoured cheques and Bank statement showing reversal of cheques deposited were submitted by the appellant. Sr No. Cheque No. & Cheque Date Drawn On Amount (in Rs.) P a g e | 6 ITA No. 940/MUM/2023 AY. 2017-18 DCIT Vs SURONIK OVERSEAS PVT LTD 1. 118642 dated 20/02/2015 Axis Bank, Pune 10,00,000 2. 118641 dated 20/02/2015 Axis Bank, Pune 10,00,000 3. 118645 dated 28/05/2015 Axis Bank, Pune 5,00,000 4. 118708 dated 22/03/2015 Axis Bank, Pune 4,00,000 5. 128091 dated 30/04/2015 Axis Bank, Pune 2,90,000 6. 000301 dated 10/07/2015 Axis Bank, Mumbai 5,00,000 7. 000300 dated 27/05/2015 Axis Bank, Mumbai 5,00,000 Total 41,90.000 These cheques were issued by M/s. CNS Infotech on various dates from 20.02.2015 to 27.07.2015 for goods/services provided to him by appellant. After the bouncing of cheques, the appellant levied interest upon the said party. Inspite of the same, the cheques issued by M/s. CNS Infotech continued to be dishonoured. b) All efforts of appellant to recover the outstanding due failed, therefore, appellant issued intimation to the proprietor i.e. Nilesh D Saplade that criminal case under the Negotiable Instruments Act shall be filed against him in April, 2016, if the dues are not settled. The said party came forward and settled the dues of Rs.41,63,069/- in cash towards full and final settlements of dues with request to waive off the interest levied on account of dishonoring of cheques. Appellant filed VENT copy of letter issued by the Proprietor Nilesh D Saplade dated 05.04.2016 requesting him to accept cash for settlement of outstanding dues and for waiver of interest. c)The Proprietor namely Nilesh D Saplade passed away on 18.04.2016 and appellant filed copy of his death certificate. Due to the same the notice issued u/s 133(6) of the Act by the AO was not complied with. d) All the relevant documentary evidences in support of its contentions were filed by appellant to prove the genuineness of these transactions with M/s. CNS Infotech like P a g e | 7 ITA No. 940/MUM/2023 AY. 2017-18 DCIT Vs SURONIK OVERSEAS PVT LTD Confirmation letter of M/s. CNS Infotech for FY 2014-15 Copies of dishonored cheques Bank statement reflecting reversal of cheques deposited Copy of letter issued by Nilesh D Saplade dated 05.04.2016 requesting appellant to accept cash towards full and final settlement of dues and waiver of interest levied. Death certificate of Nilesh D Saplade. These facts prove that M/s. CNS Infotech was a Debtor of appellant as on 01.04.2016. e) Thus, due to the above reason the notice issued u/s.133(6) to Nilesh D Saplade could not be complied with as he had expired on 18.04.2016. The above facts clearly show the nature and source of cash in hand of Rs.41,63,069/- in the books of accounts of appellant in April 2016. These facts also explain as to why the amount outstanding since FY 2014-15 was suddenly paid by the said party in April 2016 resulting in cash in hand in the books of accounts of appellant. In view of facts and documentary evidences filed by appellant it is clear that nature and source of cash deposit of Rs.41,63,060/- stands explained. Hence, the addition made by the AO u/s.69A of Rs.41.63,060/- is not sustainable in the eyes of law and same is hereby deleted. 7.2 Without reiterating the facts as elaborated above during the course of assessment proceeding the assessee explained that it has received cheques from M/s CNS InfoTech in respect of amount due on sale made to that party in the earlier year. However, the cheques received were dishonoured therefore, the assessee informed him that complaint will be filed in the criminal court under the Negotiable Instrument Act. To avoid such proceeding under the Negotiable Instrument Act the said party has made the payment of outstanding amount of sale made in P a g e | 8 ITA No. 940/MUM/2023 AY. 2017-18 DCIT Vs SURONIK OVERSEAS PVT LTD earlier year in cash. It is also explained that during the course of assessment proceedings party could not respond to the notice u/s 133(6) of the Act issued by the AO because said party expired on 18.04.2016 as evident from the copy of the death certificate enclosed at page no.79 of the paper book filed. At page no.80 to 85 of the paper book the Ld. Counsel placed copies of ledger account showing the transactions of sales made on daily basis from 31.12.2013 to 14.04.2016 of sale of goods and payment received from CNS Infotech. The assessee has also submitted copies of bank statements showing that cheques received from the said party were dishonoured. The assessee has explained with relevant supporting material that an amount of Rs.41,63,068/- was received from one of the sundry debtor M/s CNS Infotech on 05.04.2016. At page no.78 of the paper book, the assessee has enclosed copy of letter dated 05.04.2016 received from the CNS Infotech showing the invoice number along with date between 22.12.2014 to 3.05.2015 showing purchases made from the assessee against which the cash payment was made. The assessing officer has not brought any material on record to disprove the claim of the assessee that it made sale to M/s CNS Infotech in the earlier years against which the said party had issued the following cheques. Sr No. Cheque No. & Cheque Date Drawn On Amount (in Rs.) 1. 118642 dated 20/02/2015 Axis Bank, Pune 10,00,000 2. 118641 dated 20/02/2015 Axis Bank, Pune 10,00,000 3. 118645 dated 28/05/2015 Axis Bank, Pune 5,00,000 4. 118708 dated 22/03/2015 Axis Bank, Pune 4,00,000 5. 128091 dated 30/04/2015 Axis Bank, Pune 2,90,000 6. 000301 dated 10/07/2015 AxisBank, Mumbai 5,00,000 7. 000300 dated 27/05/2015 Axis Bank, Mumbai 5,00,000 P a g e | 9 ITA No. 940/MUM/2023 AY. 2017-18 DCIT Vs SURONIK OVERSEAS PVT LTD Total 41,90.000 All the aforesaid cheques issued by proprietor of CNS InfoTech were dishonoured evident from the stamp placed on the cheques by the bank . At page no. 97 to 106 of the paperbook the assesse filed copies of its Bank A/c statement maintained with the Indian Overseas Bank showing that cheques issued by the CNS Infotech at the first stage were credited to the account of the assesse by the said bank but same were reversed by debiting the bank accounts of the assesse on dishonor of the cheques. Therefore, said party has settled his outstanding dues of Rs.41,63,060/- in cash towards full and final settlement of amount payable to the assessee in respect of the sale made in the earlier years. There is no prima facie material brought on records by the AO to disprove the claim of the assessee of supplying goods and receiving cash payment from M/s CNS InfoTech under the circumstances as discussed supra in this order therefore in view of the above facts and circumstances, we do not find any infirmity in the findings of the CIT(A) as elaborated above. Therefore, this ground of appeal of the revenue is dismissed. 7.2 Regarding gift vouchers, the assessee explained during the course of assessment proceedings that it had received incentive in the form of gift vouchers of Tanishq from its supplier The relevant part of the decision of Ld. CIT(A) is reproduced as under: “7.8 Addition of Rs.75,16,801/- u/s.69A of Act a) As per the Audited Balance Sheet filed by appellant for AY 2016- 17 Le previous AY, the appellant held Gift vouchers of Rs.75,16,801/- Thus, these Gift vouchers duly recorded in the P a g e | 10 ITA No. 940/MUM/2023 AY. 2017-18 DCIT Vs SURONIK OVERSEAS PVT LTD books of accounts of appellant. Copies of the Gift vouchers were filed. b) In assessment proceedings the appellant explained that due to increase in Sales / Turnover in comparison to PY, the appellant received Gift vouchers of "TANISHQ” from its supplier. Appellant filed confirmation of Gift vouchers received and encashed by appellant resulting in generation of Rs.75,16,801/- in cash. c) In view of these facts there is no reason that appellant should have sold such gift in any of the previous AY's. d) Appellant had maintained stock ledger of Gold Gift vouchers for AY 2016-17 and AY 2017-18 and has 43 invoices showing cash sale of these vouchers on 30.04.2016. The name and address of the buyer is clearly mentioned on these sales invoices of Sanghvi Electronics Pvt. Ltd. and output VAT @1.20% is charged on these sales invoices. Appellant gave discount to the purchasers in the form of price reduction. 7.9 As on 01.04.2016, the opening cash in hand with appellant was Rs.5,55,438/- Appellant filed detailed reconciliation of the cash balance available with the appellant along with copy of bank statement before the AO in response to the SCN dated 11.12.2019. The same is as under- Month Cash Sales Withdrawn from Bank Cash Received from Debtors Cash Deposit in Bank Used for Expenses Balance Opening Balance 5,55,438.45 Apr-16 76,07,000.00 1,50,395.00 41,63,069.00 26,667.45 1,24,49,235.00 May-16 63,000.00 60,363.00 15,000.00 15,000.00 62,030.00 1,25,10,568.00 Jun-16 12,796.00 1,50,720.00 1,23,72,644.00 July-16 26,550.00 7,511.21 39,870.00 7,928.00 1,23,58,907.21 Aug-16 27,500.00 1,23,31,407.21 Sep-16 6,000.00 46,300.00 1,22,97,107.21 P a g e | 11 ITA No. 940/MUM/2023 AY. 2017-18 DCIT Vs SURONIK OVERSEAS PVT LTD Oct-16 2,000.00 6,000.00 2,000.00 1,22,97,107.21 Nov-16 34,000.00 95,00,000.00 28,31,107.21 Dec-16 50,000.00 33,650.00 26,80,000.00 2,34,757.21 Jan-17 1,75,000.00 5,51,930.00 9,61,687.21 Feb-17 3,25,000.00 2,25,000.00 15,11,687.21 Mar-17 3,00,000.00 41,795.00 14,00,000.00 4,53,482.21 Total 77,04,550.00 11,02,269.21 50,49,240.00 1,38,61,390.00 96,625.45 9,26,03,696,89 Appellant contended that cash was deposited in the bank during the demonetisation from the cash in hand available including cash withdrawal made on earlier dates of Rs.2, 10,000/-. 7.10 a) Thus, allegation of AO that the cash deposited during the demonetization period had arisen from some undisclosed source not reflected in the books of account as against the accounted cash sales claimed in the audited books of account dehorns any credible evidence/material on record is unsustainable both in law and on facts. b) No material was brought on record by the A.O. to draw an inference that the explanation/evidences offered by the Appellant are incorrect or unreasonable or that the impugned sum represented income of the Appellant from undisclosed sources. c) Appellant has discharged his onus to prove cash deposit is out of trading activity by furnishing supporting evidence like, sales bills sales register, cash book, stock register etc. d) It is onus of the AO to rebut the evidence furnished by the appellant with cogent materials. The A.O. has not brought on any records that cash deposits in bank which is out of trading income as disclosed by the appellant is no correct proposition P a g e | 12 ITA No. 940/MUM/2023 AY. 2017-18 DCIT Vs SURONIK OVERSEAS PVT LTD but, appellant has other source of income which has been deposited. e) Since no tangible evidence was brought on record by AO to effect that sales proceeds received by appellant for sale to its customers was. In fact, not genuine, camouflaged as such sale consideration nor AO made out any case of subterfuge or colorable device having been adopted at hands of appellant, it would be wholly unjustifiable to treat the sales of appellant as unexplained cash credit. f) It is the AO's duty to establish with evidences that the facts stated by the appellant are not correct since the law of burden is canonized in common law doctrine "INCUMBIT PROBATIO QUI DIGIT NON QUI NEGAT". i.e. burden lies upon one who alleges and not upon one who deny the existence of the fact. g) Appellant had sufficiently discharged the burden which lay upon it to explain the nature and source of the cash deposit shown as income appearing in his accounts and the burden clearly shifted on to the AO to prove to the contrary and hold that in spite of the appellant's explanation, the income shown by appellant could still held to represent the appellant's income from undisclosed sources. There was no material whatsoever on the record on the basis of which the AO could be said to have discharged that burden. h) Hon'ble ITAT Ahmedabad in the case of ANANT VALLAVDAS MEHTA vs. INCOME TAX OFFICER (2015) 43 CCH 0017 AhdTribheld that: "Assessee's contention cannot be brushed aside simply on the basis of surmises and conjectures and without bringing on P a g e | 13 ITA No. 940/MUM/2023 AY. 2017-18 DCIT Vs SURONIK OVERSEAS PVT LTD record material to controvert the explanation of the assessee. In absence of any material brought by AO to show that the explanation of the assessee was not plausible, no good reason was found to interfere with the order of theCIT(A)” i) The AO has made the addition holding that no details like name, address, PAN was given of parties to whom Cash Sales were made. There is No obligation on the part of assessee to keep record of address of cash customers. This has been held in the following judicial pronouncements - Hon'ble Bombay High Court in the case of R.B. JessaramFatehchand (Sugar Dept.) vs Commissioner of Income-tax 75 ITR 33 (Bombay) held that: "The ITO had scrutinised closely the account books of the assessee and had found no fault with them excepting that the addresses of the customers for the cash sales of sugar had not been entered. It was not found by him that there were any other reasons for not accepting the said cash sales, such as, for instance, the sales being at lower rates than what were prevailing in the market or that they were not comparable with the other verified sales, which the assessee had made during the material time. In these circumstances, the reason given by the ITO for rejecting the book results shown by the assessee's accounts or for not accepting the cash transactions as genuine could not be accepted as good and sufficient unless there was an obligation on the part of the assessee to keep a record of the addresses of the cash customers. It could not, therefore, be said that the failure on his part to maintain the addresses was a suspicious circumstance giving rise to a doubt about the genuineness of the transactions entered into by the assessee. P a g e | 14 ITA No. 940/MUM/2023 AY. 2017-18 DCIT Vs SURONIK OVERSEAS PVT LTD Since, having regard to the nature of the transactions and the manner in which they had been effected, there was no necessity whatsoever for the assessee to have maintained the addresses of cash customers, the failure to maintain the same or to supply them as and when called for could not be regarded as a circumstance giving rise to a suspicion with regard to the genuineness of the transactions. The Tribunal, therefore, was not right, in setting aside the order of the AAC and restoring that of the ITO. There were no circumstances disclosed in the case nor was there any evidence or material on record which would justify the rejection of the book j) Hon'ble Delhi High Court in the case of the Commissioner of Income Tax-ll vs. JINDAL Dye Chem Pvt Ltd ITA 283/2011& ITA 343/2011 held that: "11. We may also point out that we had enquired from the learned counsel for the appellant as to whether there was any requirement in law of recording the names of the purchasers of the bullion to whom the cash sales of gold and silver were made. The learned counsel for the revenue stated that there was no such requirement in law at the relevant time. Consequently, no inference could have been drawn by the Assessing Officer on account of the fact that the assessee was not in a position to furnish the names of the persons to whom the cash sales of the bullion were made." k) Hon'ble ITAT Ahmedabad in the case of M/s. Nitisha Silk mills Pvt. Ltd., Vs. ITO, Wad 1(4), Surat I.T.A. No. 896/ Ahd/2011 held that: P a g e | 15 ITA No. 940/MUM/2023 AY. 2017-18 DCIT Vs SURONIK OVERSEAS PVT LTD "10. have considered the rival submissions, perused the material onrecord and have gone through the orders of authorities below and thejudgment cited by the Ld. A.R. We find that this is noted by the A.O. onpage 30 para 7 of the assessment order that the assessee has claimedto have effected cash sales of grey cloth on three dates i.e. 16.5.2006, 17.5.2006 and 31.3.2007 totaling an amount of Rs.9,95,870/-. The A.O.'sobjection is this that why cash sale is only on these three dates in theyear and not on other dates. With regard to this objection of the A.O., itwas submitted by the assessee before the A.O. vide written submission dated 29.12 2009 that since the assessee decided to discontinue the business major quantity of grey cloth lying in various process houses were called back without processing and the grey cloth so received was sold in cash. It is also submitted that some of the process houses could not trace grey cloth of the assessee and therefore, cash equal to that value of grey cloth was given by the owners of the process houses. Considering these facts of the present case, in its entirety, we are of the considered opinion that the claim of the assessee regarding cash sales under peculiar conditions that the assessee was discontinuing its business and therefore some sales were made in cash cannot be summanly rejected. We also find that it is observed by the Ld. CIT(A) on pages 51-52 of his order that the assessee could not provide even the names and addresses of those parties to whom cash sales were claimed to have been made. This is the main basis on which Ld. CIT(A) has confirmed the decision of the A.O. In our considered opinion, it cannot be said that in the P a g e | 16 ITA No. 940/MUM/2023 AY. 2017-18 DCIT Vs SURONIK OVERSEAS PVT LTD case of cash sales, the assessee is bound to keep record of the names and addresses of the buyers The judgement of Hon'ble Bombay High Court cited by the Ld. A.R. rendered in the case of RB GumamFatehchand vs ACIT as reported in 75 ITR 33 also supports the case of the assessee. In that case also, the assessee was not in a position to give the addresses of the customers to whom cash sales were made. Under these facts, it was held by the Hon'ble Bombay High Court that this cannot be the basis to reject the book results. Respectfully following the judgment of Hon'ble Bombay High Court, we delete this addition also. Ground No.2 is also allowed." 7.11 The above facts show as under- Gift vouchers of "TANISHQ" are duly recorded in the balance sheet of appellant in the earlier AY i.e. AY 2016- 17. This shows that it is a genuine transactions. These Gift vouchers are duly recorded in the stock ledger of Gold Gift vouchers of appellant for AY 2016-17 and AY 2017-18. Copies of Gift vouchers were submitted by appellant. These gift vouchers were encashed in AY 2017-18. Appellant filed confirmation of receipts of Gift vouchers and its encashment resulting generation of cash of Rs.75, 16,801/-. This is the reason that there was no sale of gift vouchers in earlier AY'S. Appellant has 43 sale invoices of these gift vouchers to various parties. The name and address of party who purchased these gift vouchers are duly mentioned on these sale invoices. Appellant has charged VAT @1.20% P a g e | 17 ITA No. 940/MUM/2023 AY. 2017-18 DCIT Vs SURONIK OVERSEAS PVT LTD on the said sale. Appellant has sold these gift vouchers at a price reduction. In view of the above facts and discussion, the addition of Rs.75,16,801/- made by the AO u/s.69A is not sustainable and same is hereby deleted. The assessee has explained that due to increase in sale turnover in comparison to previous year the assessee received gift vouchers from the supplier. The assessee had maintained stock ledger of gift vouchers for assessment year 2016-17 and assessment year 2017-18. The assessee has also filed copies of sale invoices showing charging of vat at the 1.2% on the sale invoices. The assessee also filed copies of delivery challans of receiving of Tanishq gift vouchers along with copies of shipments receipt of Blue Dart received from Dell India Pvt. Ltd. Banglore alonwith Delivery Challan & Declaration Letter showing description, quantity, unit value and total value of the items received. 8. We have perused the audited balance sheet of the assesse placed as on 31 st March 2016 and as on 31 st March 2017. The assessee company has shown inventories to the amount of Rs.292,68,678/- as on 31.03.2016. As per schedule 12 to the balance sheet as on 31 st March 2016 the above inventories also included stock of gift vouchers to the amount of Rs.76,07,000/-. Further, it is noticed from the schedule no. 19 to the notes to financial statement for the period ended 31.03.2016, that the gift vouchers was included in the closing stock of Rs.15,21,76,165/- and the Gift Vouchers was also shown in the opening stock of inventories as on 1.04.2017 in the stock of Rs.292,68,678/- as per schedule 19 of the notes to Financial statement placed at page 25 of the paper book. The assesse has also filed stock summary of Tanishq for the period 29.04.2016 to 31.03.2017 at page 65 of the paper book showing opening balance Rs.76,07,000/- and outwards of Rs. P a g e | 18 ITA No. 940/MUM/2023 AY. 2017-18 DCIT Vs SURONIK OVERSEAS PVT LTD 75,16,801/- with different quantity under various descriptions. At page no. 66 to 75 of the paper book the assessee has filed copies of invoices of the sale of Tanishq vouchers to the different buyers on which the Vat @ 1.2% was paid and such sales has been duly recorded in the turnover of the assesse. 9. The findings of the assessing officer are general in nature and the AO has not brought on record any clinching evidenced on the basis of any enquiry made by him to substantiate that the claim of the assessee of sale of gift vouchers is not genuine. 10. In view of the above facts and circumstances, we do not find any infirmity in the findings of the CIT(A). Therefore, this ground of appeal of the revenue is dismissed. 11. After considering above facts and detailed findings of the Ld. CIT(A), we do not find any merit in the ground of appeal of the revenue. Therefore, all the ground of appeals of the revenue (Ground of Appeals No.1 to 6) is dismissed. 12. In the result, the appeal of the revenue stand dismissed Order Pronounced in Open Court on 20.07.2023 Sd/- Sd/- (SANDEEP SINGH KARHAIL ) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER Place: Mumbai Date 20.07.2023 ANIKET SINGH RAJPUT/STENO P a g e | 19 ITA No. 940/MUM/2023 AY. 2017-18 DCIT Vs SURONIK OVERSEAS PVT LTD आदेश की प्रतितलति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीलीय अतिकरण/ ITAT, Bench, Mumbai.
