APR Jewellers (P) Ltd Vs ITO (ITAT Hyderabad)
Conclusion: Additions made on account of cash deposits during the demonetization period and disallowance of loss on the derivative transactions, were remanded for fresh adjudication after the verification of sales records and transaction nature.
Held: Assessee was engaged in retail trade of gold bars and jewellery, filed its return declaring income of ₹1,78,860/-. The case was selected for scrutiny on issues of cash deposits during demonetization, loans & advances, and computation of income. AO found undisclosed cash deposits of ₹1.46 crore in SBI accounts during demonetization, while return showed “Nil” deposits. AO rejected assessee’s explanation of cash sales and added the amount u/s 69A as unexplained. Further, a loss of ₹2.25 lakh claimed on share transactions was disallowed by treating it as capital loss. It was held that once assessee had produced the bills & vouchers in support of the claim of the sales, the same ought to have been verified and examined before treating the sales as bogus. CIT (A) had given much emphasis on typographical mistake in the statement of turnover for the month of November, 2016 where assessee had claimed that the entire sale was cash sales, however, there was a typographical mistake in showing the cash sales of October, 2016 showing the same figure of cash sales of November, 2016 which was apparent from the details itself reproduced by CIT (A) of the impugned order. CIT(A) mischaracterized derivative transactions as share dealings and also verify and examine the correctness of the claim of sales and particularly, the bills & vouchers produced by the assessee in support of the claim of the sales. It was apparent from the order of AO as well as CIT (A) that the relevant correct facts had not been considered by the authorities below while passing the impugned orders.
