2023 (3) TMI 314

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..... 2. The assessee has raised the following grounds of appeal: "1] The Learned Assistant Commissioner of National Faceless Appeal Centre, Delhi is not justified in confirming the Addition of Rs.37,34,000/made U/s.69A of the Act by D.C.1.T/CIRCLE-1/SALEM/TAMIL NADU. 2] The Appellant is maintaining Books of Accounts wherein the Labour Charges received from Silver Leg Chains making Business and Rental Receipts are credited and the Gross Income amounted to Rs.12,43,500 /- 3] The Appellant has been regularly filing the return of income for the earlier Years and the Sundry Debtors available as on 31.03.2016 to an extent of Rs.34,00,000 /- along with the other debtors realization in the accounting Year Ended 31.03.2017....

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.... 8] Normally in any trading activity the advancement of Money to the workers and realization of the said amount in the subsequent year is an inevitable transaction and hence it cannot be considered as false one. 9] In fact in Page.No.12 of the Appellate order the Appellate Authorities are discussing about the Cash summery filed for the Month of November 2016 & October 2016 which are as Under:- Month Realization of Sundry Debtors October 2016 Rs. l, 7 4,58,027 November 2016 Rs. 1,22,90,526 10] When the appellant was able to produce the cash book wherein there are realization of Sundry Debtors as per the figures mentioned above the possibility of deposit of Rs.37,34,000/- out of the realization from Sundry....

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.... accepted by the Assessing Officer there cannot be any addition U / s.69A of the Act to Tax the Deposit of Demonetized currencies U / s.115BBE and hence taxing it at 60% may kindly be deleted. 15] The Appellant relies on the GAZETTE notification issued by the Ministry of Law and Justice on the specified Bank notes "(Cessation of Liabilities) Act 2017 dated 28.02.2017. As per Section.2(1)(a) of the said Act which informs about the appointed day means 31Day of December 2016:" As per the said specified Bank notes (Cessation of Liabilities) Act 2017 published by the Ministry of Law and Justice, as per Section.5 "on and from the appointed Day, no person shall, knowingly or voluntarily hold, transfer or receive any specified Bank note". ....

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....deposits, although claims to have realized sundry advances appearing in the balance sheet. The AO has discussed the issue in light of decision of Hon'ble Supreme Court in the case of Smt Srilekha Banerjee and others vs CIT, Bihar & Orissa reported in 1964 AIR 697, and argued that when the Government has withdrawn legal tender of specified bank notes of Rs. 500/- & Rs. 1000/-, then the assessee accepting said notes from his customers and depositing into bank account is under violation of guidelines issued by the RBI and thus, rejected arguments of the assessee and made addition of Rs. 37,34,000/- u/s. 69A of the Income-tax Act, 1961 (hereinafter referred to as "the Act") and levied tax u/s. 115BBE of the Act. 4. Being aggrieved by the ass....

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....,34,000/- u/s 69A. 6.2 In the grounds of appeal, the appellant contested that the said deposit of Rs.37,34,000/- was made out of the realization of Sundry Advances of Rs.34,00,000/- appearing in the Balance sheet as on 31.03.2016 for which year the ITR was filed on 30.07.2016 before demonetization announced on 08.11.2016. 6.3 In the written submission the appellant stated that the said cash deposit of Rs.37,34,000/- was made out of the realization of Sundry Advances of Rs.34,00,000/- as on 31.03.2016 and out of collections from the sales made during the year ended on 31/3/2017." 5. The Ld. Counsel for the assessee, submitted that the ld. CIT(A) erred in sustaining additions made towards cash deposits inspite of fact tha....

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....f liability) Act, 2017, it comes into effect from 31.12.2016, on or from the appointed date, no person shall knowingly or voluntarily hold, transfer or receive any specified bank notes. From the above it is clear that up to 31.12.2016, person can deposit specified bank notes into bank accounts and this proportion is supported by the decision of ITAT Vishakhapatnam Benches in the case of Sri Tatiparti Satyanarayana in ITA No. 76/Viz/2021. 8. Having said so, let us come back to the facts of the present case. As per the explanation of the assessee source for cash deposits is out of realization of sundry advances shown in the balance sheet as on 31.03.2016. We have gone through various evidences filed by the assessee including ITR filed for ....