Recorded sales supported by books and stock records cannot be taxed again as unexplained cash deposits.

Cash deposits supported by recorded sales entries, sale invoices, cash book, sales account, stock register and VAT returns could not be treated as unexplained money under section 69A. The audited books were accepted and the stock position was not disputed, so the sales proceeds had already been brought into the trading results and taxed through the books. On those facts, adding the same receipts again as unexplained cash deposits would amount to double taxation. The ITAT Delhi therefore held the addition unsustainable and deleted it in favour of the assessee.

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Issues: Whether the addition made under section 69A on account of cash deposits, treated as unexplained money arising from alleged bogus cash sales, was sustainable.

Analysis: The cash deposits were supported by recorded sales entries, sale invoices, cash book entries, sales account, stock register, and VAT returns. The books of account were audited and accepted, and the stock position was not disputed. The addition was based on the assumption that the cash sales were bogus, but the material on record showed that the sales proceeds had already been brought into the books and taxed through the trading results. In these circumstances, treating the same receipts again as unexplained money would amount to taxing the same income twice.

Conclusion: The addition under section 69A was not sustainable and was deleted, in favour of the assessee.

Final Conclusion: The appeal succeeded and the impugned addition was set aside on the ground that recorded sale proceeds supported by books and stock records could not again be assessed as unexplained cash deposits.

Ratio Decidendi: Where cash deposits are fully explained by duly recorded sales supported by books of account, stock records and other contemporaneous evidence, they cannot be assessed again as unexplained income under section 69A.

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