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of <h1>Cash deposits during demonetization treated as explained business receipts; additions under sections 68 and 115BBE deleted</h1> ITAT set aside the addition made u/s 68 and the consequential higher tax rate u/s 115BBE on alleged unexplained cash sales during the demonetization ... Addition u/s 68 charged the tax at a higher rate u/s 115BBE - unexplained cash sales during demonetization period - HELD THAT:- A perusal of the record would indicate that assessee has sufficient stock which was sold by him and out of the sale proceeds, deposits have been made. The ld. Revenue Authorities have not analytically examined the facts and circumstances of the case nor the stock position available with the assessee as on 01.04.2016 vis-a-vis 31.03.2017. AO has only made an analysis of the cash position during the demonetization period whereas he ought to have taken a holistic picture of the whole year and then work out whether any extra cash was available with the assessee or not. AO has read the details half-heartedly and unnecessarily created an artificial bifurcation of the business undertaken during the period. Assessee has made sales during the year in cash and assessee's cash balance is being deposited in the account. Assessee was even eligible to make cash sales during demonetization period because he was dealing in edible oil, sugar and grain items. Appeal of the assessee is allowed. The assessee, an individual engaged in wholesale and retail trade of sugar, edible oil and foodgrains, was subjected to scrutiny assessment for AY 2017-18. The Assessing Officer treated cash deposits of Rs. 68,35,000/- during the demonetization period as unexplained, allowed credit of only Rs. 4,60,000/- towards cash sales, and made an addition of Rs. 63,41,000/- under Section 68, taxing it at the higher rate under Section 115BBE. The Tribunal examined the records and found that the assessee had 'sufficient stock which was sold' and that deposits were out of sale proceeds. Revenue authorities had not 'analytically examined' the stock position as on 01.04.2016 vis-à-vis 31.03.2017 and had restricted their analysis only to the demonetization window, creating an 'artificial bifurcation' of business. Holding that the assessee could lawfully make cash sales during demonetization, the Tribunal deleted the entire addition of Rs. 63,41,000/-.
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