2022 (7) TMI 1381

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....d the issues arising out of the same are as follows: i. Addition of Rs.19,50,000/- under section 68 of the Act ii. Addition of Rs.6,97,272/- under section 69C of the Act 3. The assessee is a dealer for Motor Pumps, irrigation products, pipes and fitting. The assessee filed the return of income for Assessment Year 2017-18 on 10.08.2017 declaring an income of Rs.37,16,360/-. The case was selected for scrutiny by issuing notice under section 143(2) of the Act. The Assessing Officer (AO) asked the assessee to furnish the details of cash deposits made during demonetization period in all the bank accounts with sources, material evidences and cash book. The assessee submitted a certificate from Corporation Bank [page 334 of Pa....

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....consistent at the same level. v. The books of accounts are audited by the Chartered Accountant who had verified all the details during the course of audit and have certified the correctness and completeness of the books of accounts. vi. The AO and the CIT(A) have accepted the books of accounts including the sales numbers and therefore cannot make an addition under section 68. vii. The product of the assessee caters mainly to farmers in and around Shimogga and hence most of the sales are done through cash and it is the reason for assessee could not file the details of persons to whom sales is made. viii. The sales of the assessee increases post rainy season i.e., September and the sales during second half ....

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....n. The assessee has submitted cash book, sales account, purchases account, etc., before the lower authorities to substantiate that the source for the cash deposit is from the cash sales. The assessee has also furnished details pertaining to the previous financial Year i.e., 1st April, 2015 to 31st March, 2016, ledger extracts of sales account, cash book, etc., to evidence the fact that the assessee's sales figures are genuine. Before us, the learned AR submitted the cash sales details from Assessment Year 2015-16 to Assessment Year 2019-20 where we see that the cash sales numbers of the assessee has been increasing year to year especially from the Assessment Year under consideration. In the same table, the learned AR drew our attention to t....

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....osit of SBN during demonetization period on the ground that the cash sales is inflated by the assessee. The amount of sales which is not disputed is already offered to tax by the assessee by reflecting the same in the trading / P&L Account. This fact is not doubted by the lower authorities. In that case, if the cash deposits are added under section 68 of the Act, then it would result in taxing the impugned amount twice, once as a sales income and secondly as an addition under section 68 of the Act. The Hon'ble Delhi High Court in the case of PCIT Vs. Singhal Exim Pvt. Ltd., [ITA No.228/2020 dated 22/02/2021] on similar issue took the view that the addition under section 68 of the Act is contradictory to the stand taken while accepting the b....

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.... for the assessee to prove that even if the cash receipts represents income, it is income from a source, which has already been taxed." Applying this ratio, in our view, the assessee has discharged the onus by offering the sales for taxation and therefore the same income cannot be taxed again. In view of the above discussion, we are of the considered view that the addition of Rs.19,50,000/- made under section 68 of the Act cannot be sustained and is therefore deleted. This ground is allowed in favour of the assessee. 12. The next issue for our consideration is the addition made under section 69C of the Act. During the year under consideration, the assessee claimed Rs.33,985/- as deduction towards housing loan interest. The AO called for ....

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....he same. 14. The learned DR supported the orders of the lower authorities. 15. We heard the rival submissions and perused the material on record. The correct statement of the housing loan as per the ledger of the assessee is as given below: Date Particulars Vch Type Vch No. Debit Credit 1-Apr-16 By Opening Balance       6,07,074.00 30-Apr-16 By Accrued SBM H L Interest A/c Payment 58   7,434.00 31-May-16 By Accrued SBM H L Interest A/c Payment 138     17-Jun-16 To SBMOID A/c - 64049503310 Contra 55 67,000.00     By Bank Charges Payment 174   55.00 30-Jun-16 By Accrued SBM H L In....