2024 (8) TMI 464

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

...., New Delhi (hereinafter referred to as 'AO') under Section 143(3) of the Income Tax Act, 1961 (the Act) concerning Assessment Year 2017-18. 2. As per the grounds of appeal, the assessee has challenged the addition of Rs. 44,71,907/- sustained by the CIT(A) out of the total addition of Rs. 50,53,094/- made by the AO towards unexplained cash deposits under section 69A r.w.s 115BBE of the Act. 3. In the course of hearing, the learned Counsel for the assessee submitted that assessee has been trading in jewellery and bullion. The sale of jewellery and bullion etc. comprises of cash as well as through banking channel. A comparative chart was referred from Assessment Years 2014-15 to 2017-18 in this regard. It was submitted that the average....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the assessee has presented and unrealistic picture of source of cash deposits. 7. We have carefully considered the rival submissions and perused the material available on record. The controversy revolves around source of cash deposit of Rs. 65,00,000/- during demonetization period. The CIT(A) has adjudicated the issue granting partial relief to assessee as under: "4.3 I have considered the matter. As seen from assessment order, assessee was found to have deposited specified bank notes amounting to Rs. 65,00,000/- during the period of demonetization. The assessee had claimed that source of cash deposited was out of: 1. Opening Cash in Hand - Rs. 13,81,187/- 2. Cash sales - Rs. 38,83,771/- 3. Cash withd....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Amount 24.06.2016 4,00,000/- 27.06.2016 4,00,000/- 29.09.2016 5,00,000/- 07.10.2016 4,00,000/- In the assessment order, the AO stated that entire amount of Rs. 12,00,000/- is treated as unexplained. The AO pointed out the fact that assessee was paying interest to bank while at the same time claiming to keep substantial amount of cash in hand. In my view, the explanation regarding keeping so much of cash in hand for pretty long time is not convincing. However, the withdrawals on 29.9.2016 and 7.10.2016 are not too far apart from the date when demonetization was announced. In my considered view, assessee can be given the benefit of withdrawals that took place on 29.9.2016 and 7.10.2016. Hence, addition is r....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... with the decision of the AO on the issue of addition of cash deposit from purported cash sales. In the result, assessee gets relief of Rs. (1,81,187 & 4,00,000/-) or Rs. 5,81,187/- Appeal is partly allowed." 8. On perusal of facts on record, it is observed that the assessee has declared opening cash in hand on 01.04.2016 at Rs. 13,81,187/-. In the absence of documentary evidences, the AO treated Rs. 6,81,187/- to be unexplained out of such opening cash in hand. The CIT(A) substituted the opening cash in hand at Rs. 8,81,187/-. The assessee on the other hand, seeks to assert that Rs. 12,00,000/- have been sourced out of opening cash in hand. In the light of factual matrix made available and withdrawals in the earlier ye....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....t case, has sought to explain the source of deposits, out of large cash in hand out of aggregate cash sales prior to demonetization, out of cash withdrawals between 01.04.2016 to 31.10.2016 etc. The explanation appears almost unrealistic and freak. It is unbelievable that the assessee would keep large cash in hand and continue to keep the cash generated from sales in its custody without any corresponding payments for purchases in the intervening period on deposit in Bank. The explanation offered towards source of cash deposit, when the facts are seen in perspective, do not inspire any confidence. The assessee has done nothing to dispel the perception of the Revenue towards propriety of source of deposits. In the same breath however, it is d....