Demonetisation exemption for fuel station sales protected cash deposits traced to petrol, diesel and gas receipts from addition.

Cash deposits of specified bank notes from sales of petrol, diesel and gas were held to fall within the demonetisation exemption for authorised fuel stations of public sector oil marketing companies. The assessee produced books of account and cash details linking the deposits to fuel sales during the relevant period, and the Tribunal accepted that the receipts matched the notified category. As the deposits were covered by the applicable notification, they could not be treated as unexplained money under section 69A, and the consequential addition under section 115BBE was deleted.

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Issues: Whether cash deposits of specified bank notes received from sales of petrol, diesel and gas during the demonetisation period could be treated as unexplained cash deposits and taxed under section 69A.

Analysis: The assessee was an authorised dealer of a public sector oil marketing company and had produced books of account and cash-related details. The deposits in question were traced to receipts from sale of petroleum products during the period covered by the relevant demonetisation notifications. The governing notification, as substituted and extended, permitted receipt of specified bank notes for purchase of petrol, diesel and gas at stations operating under the authorisation of public sector oil marketing companies. The addition survived only on the footing that receipts after 24.11.2016 were outside the exemption, but the Tribunal accepted that the assessee's receipts fell within the notified category of sales from the fuel station business.

Conclusion: The cash deposit was covered by the applicable demonetisation exemption and could not be taxed as unexplained money; the addition under section 69A read with section 115BBE was deleted.

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