TaxTMI 
TaxTMI 
2024 (2) TMI 1405
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.... alter the existing grounds of appeal on or before the date of hearing. 3. The Assessee is engaged in the business of whole sale and retail trading of cloth. The year under consideration, the Assessee has declared an income of Rs.3,31,710/- by filing the return of income on 1.7.2017. The case was selected for scrutiny under CASS and the statutory notices were duly served on the Assessee. During the course of assessment the AO noticed that the Asseessee has deposited a sum of Rs.39,34,000/- in the bank account maintained with Axis Bank during the demonetization period in Specified Bank Notes (SBN). The AO called on the Assessee to provide the source of cash deposits with necessary documentary evidences. The Assessee submitted the details of cash in hand, cash sales, cash withdrawn from bank account, stock register and sample purchase bills as documentary evidences. The AO after perusing the details filed by the Assessee held that: "6. Having regard to the above and considering the assessee's submission, the total income of the assessee is being assessed subject to the following discussion. ANALYSIS OF CASH ENTRIES APPEARING DURING F Y 2016-17 Cash d....
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....ction of the assessing authorities to hold that the amount represented income from some undisclosed source. 7. In this case as per the information available, during the previous year relevant to the A.Y. 2017-18, the assessee has made cash deposits aggregating to Rs. 39,34,000/- On perusal of Bank statement it is seen that the assessee has withdrawn of Rs 4,50,000/- & Rs.1,00,000/- from his Bank account on 05/112016 & 08/11/2016 respectively. Hence this amount considered as explained and balance of Rs 33,84,000/- treated as unexplained money. 4. Aggrieved, the Assessee filed further appeal before the CIT(A) who upheld the order of the CIT(A). Aggrieved the Assessee is in appeal before the Tribunal. 5. The learned Authorised Representative (the Ld. AR) submitted that the Assessee is engaged in the business of wholesale as well as retail trading in cloth and in retail trading the Assessee does cash sales. The Ld. AR submitted that the AO has not disputed the sales figure of the Assessee and has not rejected the books of accounts of the Assessee. Given this the AO making addition towards cash deposits which is generated from cash sales would result in double addition. T....
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....h fact is not doubted by the lower authorities and that the AO/CIT(A) have accepted the income offered by the assessee under the head Profits and Gains from Business or Profession. 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. Further the addition under section 68 of the Act is contradictory to the stand taken while accepting the business income offered to tax by the assessee. 9. We notice that the coordinate bench of the Tribunal in the case of ITO vs Swarnsarita Jewellers (I.T.A. No.1420/Mum/2023 dated 23.08.2023) has considered a similar issue and held that - 10. In view of the above facts therefore, according to us, the Ld. CIT(A) had rightly held that, when the sale proceeds of Rs.98 lacs had been supported with book results & primary evidences, which were not disproved by the AO, and that the same had already been assessed by the AO as revenue receipts from 'Business', then it was wholly improper for the AO to again tax these sale proceeds as unexplained cash credit u/s 68 of the Act, as it would amou....
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....e demonetization period and the invoice contains, name and address etc. Further there is no significant increase in the cash sales out of total sales, whereas for F.Y.2016-17 it is @ 31.27% and in comparison to F.Y. 2015-16 @ 31.44%, the Ld.AR referred to the cash flow statement, cash book and demonstrated the details of deposits made out of the cash sales and the assessee has been consistently maintaining the stock of Rs.68.07 crs for the F.Y 2015-16 and for F.Y 2016-17 it was maintained at Rs.65.38crs and the cash sales are part of the stocks maintained which is not disputed. Further the addition has been made only on the basis that after demonetization, the demonetized notes could not have been accepted as valid tender. Since the cash sales proceeds/receipts received from ITA No.1420/Mum/2023 A.Y. 2017-18 Swarnasarita Jewellers 11 the customers are reflected in the Audited Profit & Loss account as income and if the cash deposits are added under section 68 of the Act that will amount to double taxation once as sales and again as unexplained cash credit which is against the principles of taxation. The AO has not pointed out any specific adversity but made a generalize addition wit....