TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 594
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....explanation offered by the assessee for sources of cash deposits during the demonetization period was not found to be satisfactory during the assessment proceedings. 3. On the basis of the facts and circumstances of the case and in law, the Ld. CIT(A) had erred in deleting the addition of Rs. 75,57,500/- made on account of cash deposits holding that the Assessing Office had accepted the cash book produced before him during the assessment proceedings however the Assessing Officer has clearly given findings with regard to non acceptance of the cash book of the assessee-company in assessment order. 4. It is therefore prayed that the order of the Ld. CIT(A) may kindly be set aside and that of the Assessing Office be restored. 5. The appellant craves leave to add, alter, amend and/or withdraw any grounds of appeal either before or during the course of hearing of the appeal." 2. Facts of the case, in brief, are that the assessee company filed its return of income for the AY 2017-18 on 02.10.2017 declaring total income of Rs. 20,55,730/-. Subsequently, case was selected for scrutiny by issuing notice u/s 143(2) of the Act. During the year under consideration, the assessee-company w....
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....e and various decisions relied upon by the appellant. The assessee had furnished date-wise cash deposits, rebuttal of all observations and findings of the AO, which are at pages 8 to 20 of the appellate order. The rebuttal/explanation of assessee was regarding the higher cash sales up to 8.11.2016; turnover of the company in financial years 2015-16 and 2016-17; cash sales to customers; payment of interest of Rs. 59,75,080 for use of credit from CC account and not utilising the cash in hand to reduce interest burden; cash deposit in piecemeal manner and not depositing the same at one stroke. The appellant also raised issue of double taxation on cash deposit as well as sales and receipts from customers; non rejection of books of account, cash book duly recording cash sales and receipts from debtors, audited accounts under Companies Act and Income-tax Act, availability of sufficient stock, no finding regarding other use of cash and non-applicability of section 68 of the Act. The appellant had also relied on various decisions of the ITAT and Hon'ble Courts in support of the explanation/ rebuttal. 3.1 The learned CIT(A) has given his findings at paras 6 to 6.10 at pages 20 to 30 of his....
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....ngly supported order of learned CIT(A). He has filed a paper book containing-1 to 335 pages. He had taken us through the order of learned CIT(A) and argued that each and every observation and finding of AO has been duly rebutted/explained with supporting evidence, books of account and appropriate case law. He also submitted that the cash deposited during the demonetization period was assessee's own money, being cash-in-hand out of cash sales, collection from customers and cash withdrawals. The addition by AO is purely based on assumptions and presumptions. The company does not have any other source of income and cash in hand has been not utilised for any other purpose. Hence, addition of AO is not sustainable, both on facts and in law. 6. We have heard both parties and pursued the record including orders of lower authorities. We have also deliberated the case laws relied upon by the parties. In the assessment order, the AO has accepted Rs. 1,10,000 out of cash deposited of Rs. 76,67,600 in specified banking notes (SBN) during demonetization period. He accepted the first deposit of Rs. 1,10,000 on 10.11.2016 and added balance Rs. 75,57,500 deposited on subsequent dates as unexplain....
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..../-. Similarly, cash received from customers at Rs. 80,10,907 was 4.7% of the turnover, whereas it was 2.46% of the turnover in proceeding a AY 2015-16. The assessee had argued that such figures were very low compared to total turnover. 6.2. At this stage, it may be pointed out that the observations of the learned CIT(A) regarding cash sales below tolerance limit of 5% of the turnover is not correct because 44AB(a) was inserted by the Finance Act, 2020 and is not applicable for AY 2017-18. It is also factually not correct because 5% of the turnover of Rs. 16,79,83,430 comes to Rs. 83,99,171/- whereas cash sales and cash from customers was Rs. 1,22,45,717/- (Rs. 28,09,444 + Rs. 94,36,273), which is 7.29% of turnover. However, this by itself will not have any bearing on the findings of the learned CIT(A) because all these transactions including cash deposits are reflected in the audited books of account which has not been rejected by the AO. The learned CIT(A) have also given a specific finding that assessee had furnished "ledgers of cash receipt parties". The learned senior DR has not brought any anything on record to controvert the findings of the learned CIT(A). We also find that ....