Appellant: J.R. Rice India Pvt. Ltd., 5593/94, Lahori Gate, Main Road, Naya Bazar, Delhi, PAN: AACCJ1734F
Respondent: ACIT, Circle-13(1), New Delhi
Represented by: Assessee by Shri Suresh K. Gupta, CA; Revenue by Shra Anuj Garg, Sr. DR
Date of Hearing: 10.05.2023
Date of Pronouncement: 31.07.2023
Per M. Balaganesh, AM:
This appeal by J.R. Rice India Pvt. Ltd. arises out of the order dated 30.11.2022 by the National Faceless Appeal Centre (NFAC), contesting the assessment order under section 143(3) of the Income-tax Act, 1961 by the Assessing Officer, Circle-13(1), Delhi, for the assessment year 2017-18.
The core issue revolves around the justification of the addition of Rs.52,60,000 under Section 68 r.w.s. 115BBE of the Act, attributed to cash deposits made during the demonetization period. The appellant contends that these deposits were derived from legitimate cash sales and recoveries of trade debts, a claim initially dismissed by the Assessing Officer as lacking sufficient substantiation.
Detailed scrutiny revealed regular cash handling in the business, consistent with declared income and sales patterns. Noteworthy is the proportionality of cash deposits to gross sales, comparing favorably with the previous year’s figures, thereby challenging the assumption of undisclosed income.
The Tribunal observed no discrepancies in the appellant’s records, including cash books, sales ledgers, and stock registers, substantiating the appellant’s claims of routine business transactions. Moreover, the lack of negative cash balances and the prompt deposition of cash receipts within days of receipt further supported the legitimacy of the transactions.
Significant to this case was the appellant’s ability to provide detailed explanations and documentary evidence for each transaction questioned, underscoring the operational transparency. The Tribunal, therefore, found the Assessing Officer’s initial presumption of unexplained credit under Section 68 to be unjustified.
In conclusion, the addition made by the Assessing Officer was ordered to be deleted, validating the appellant’s transactions during the demonetization period as legitimate business activities. The appeal is thus allowed in favor of J.R. Rice India Pvt. Ltd.
Order pronounced in the open court on 31st July 2023.
Signed,
Shri Saktijit Dey, Vice-President
Shri M. Balaganesh, Accountant Member
Dated: 31st July 2023
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