Explained cash deposits and petty fixed asset sales cannot be taxed again when accounts and stock records are intact.

Cash deposits during the demonetisation period were accepted as explained where the assessee produced a cash book and quantitative stock details showing that the deposits arose from recorded cash sales, the books were not rejected, and no defect was found in the stock records; an estimated sales basis could not displace the maintained accounts or tax the same turnover again as unexplained income. Proceeds from sale of petty fixed assets were also accepted where the reduction was reflected in the fixed asset schedule, no depreciation had been claimed, and the absence of separate bills did not by itself justify an adverse inference. Both additions were deleted.

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Issues: (i) Whether the addition made on account of cash deposits during the demonetisation period could be sustained when the assessee produced cash book and quantitative stock details to explain the source of deposits; (ii) Whether the addition made on account of sale proceeds of small fixed assets could be sustained in the absence of supporting bills.

Issue (i): Whether the addition made on account of cash deposits during the demonetisation period could be sustained when the assessee produced cash book and quantitative stock details to explain the source of deposits.

Analysis: The assessee had opened two new retail outlets and maintained cash book entries and quantitative stock details to support cash sales. The books were not rejected, and no defect was found in the stock details. The deposits were traceable to cash sales already offered to tax as turnover. An estimate based on assumed average sales for earlier months could not displace the maintained books or justify treating the same turnover again as unexplained income.

Conclusion: The addition on account of cash deposits was deleted and the issue was decided in favour of the assessee.

Issue (ii): Whether the addition made on account of sale proceeds of small fixed assets could be sustained in the absence of supporting bills.

Analysis: The amount represented proceeds from petty fixed assets such as household and office items, and the corresponding reduction was reflected in the fixed asset schedule. No depreciation had been claimed on those items, and the nature of the receipts did not justify an adverse inference merely because individual bills were not produced.

Conclusion: The addition on account of sale proceeds of fixed assets was deleted and the issue was decided in favour of the assessee.

Final Conclusion: The appeal was allowed by deleting both additions, resulting in complete relief to the assessee.

Ratio Decidendi: When books of account and supporting quantitative details are not rejected or found defective, a receipt already recorded as turnover cannot be taxed again as unexplained income, and minor fixed-asset sale proceeds reflected in the accounts cannot be disallowed merely for want of separate bills absent contrary material.

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