TaxTMI 
TaxTMI 
2021 (12) TMI 599
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....yle of Mahalaxmi Enterprises. The business consists of dealing in beedi, tea powder and pan masala. For Assessment Year 2017-18, the assessee filed return of income declaring total income of Rs. 4,49,520/-. In the course of assessment proceedings, the AO noticed that there were several cash deposits in the two bank accounts of the assessee. Out of the aforesaid cash deposits, the AO culled out, the deposits that was made of bank notes that were declared as not legal tender owing to demonetization of currency. The details of the total cash deposits made by the Assessee in her bank account and the cash deposits of cash/currency notes that were declared as not legal tender that were deposited by the Assessee in his two bank account are as foll....
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.... Rs. 4,49,500/- to the total income of the assessee with the following observations: "As per the cash book the closing balance as on 08/11/2016 was Rs. 4,90,673/-. After reducing Rs. 4,90,673/- from total deposit of Rs. 14,50,000/-, the balance is Rs. 9,59,327/-. Out of Rs. 9,59,327/, the old SBNs are totaling to Rs. 4,50 ,500/- which stands unexplained. Hence, the same is treated as unexplained cash credits u/s 68 of the Act in the books of account of the assessee and the same is required to be brought to tax. The assessee has accepted for the addition of the same to the return income. Accordingly, a sum of Rs. 4,49,500/- is brought to tax u/s 68 of the Act and to tax as u/s 115BBE of the Act." 4. Aggrieved by the aforesaid add....
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....ng regular books of accounts and the said books are subject to compulsory audit under the provisions of section 44AB of the Act. The Assessee is also filing its VAT Returns in connection to the purchases and sales made by it to the concerned authority. It was submitted that the impugned addition made is nothing but the sales made by the Assessee. The Assessee relied on decision of ITAT Indore Bench in the case of DEWAS SOYA LTD, UJJAIN v/s Income Tax (Appeal No 336/Ind/2012 wherein on identical facts of the case it was held that the claim of the assessee that such addition resulted into double taxation of the same income in the same year because on one hand cost of the sales has been taxed (after deducting gross profit from same price ultim....
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....so as to treat the income of the assessee as income from other sources. It was also submitted that the government permitted all to deposit old demonetized notes upto 31.12.2016. Since the amounts deposited were sale proceeds of business and the income from the business have already been taxed, the impugned addition should be deleted. Our attention was also drawn to section 26(2) of the RBI Act, 1934 which provides that government can specify certain notes as not legal tender. It was argued that if there is any violation of the statutory provisions, the consequences will be only under the relevant provisions of RBI Act, 1934 and those violations cannot lead to any addition under section 68 of the Act. The learned Counsel also placed reliance....
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....nder: 9. In view of the foregoing discussion and taking into consideration of all the facts and the circumstances of the case, we have no hesitation to hold that the cash receipts represent the sales which the assessee has rightly offered for taxation. We have gone through the trading account and find that there was sufficient stock to effect the sales and we do not find any defect in the stock as well as the sales. Since, the assessee has already admitted the sales as revenue receipt, there is no case for making the addition u/s 68 or tax the same u/s 115BBE again. This view is also supported by the decision of Hon'ble Delhi High Court in the case of Kailash Jewellery House (Supra) and the Hon'ble Gujarat High Court in the....