TaxTMI 
TaxTMI 
2024 (8) TMI 548
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....t of the assessment order framed u/s 143(3) of the Act dated 18.12.2019. 1.1. The brief facts of the case of the appellant are that the assessee is engage in the business of fabrication and trading of mattress corresponding purchases are directly from single manufacturer i.e. M/s. Supreme Industries Ltd. It is alleged that during the first year of trading business majority of the appellant's sale was mainly in cash as against credit sales. The appellant filed its return of income on 07.11.2017 declaring total income of Rs. 3,32,220/-. The case of the appellant was selected for scrutiny and the Assessing Officer (hereinafter referred to as ld. 'AO') observed that appellant deposited cash of Rs. 32,42,500/- in his State Bank of Ind....
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....r also. He has filed bank statement during the FY 2016-17 and also filed the bank statement of State Bank of India of FY 2017-18 and 2018-19 to establish that amount of cash deposited before demonetization period was Rs. 85,000/- and after demonetization period up to 31.03.2017 was Rs. 1,06,48,000/-. The ld. Counsel for the assessee further submits that the Assessing Officer (hereinafter referred to as ld. 'AO') without giving cognizance to the details submitted by the appellant and with a pre-determined mind-set added the entire cash deposit in the bank account as unexplained cash credit. While making an addition the AO has accepted the accounts of the appellant along with the sales declared in the profit and loss. The ld. Counsel ....
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....017-18 e) Bank statement of State Bank of India for the FY 2018-19 f) Bank statement of Yes Bank for the FY 2016-17 & 2017-18 g) Cash book for the FY 2016-17 and the cash for the FY 2017-18 2.1. As per the case of the assessee that appellant was new into the trading business therefore, the appellant used to sell their goods in cash to reduce credit risk and saving the interest cost. On perusal of the copy of the bank statement we find that there has been a cash deposit in bank accounts not only during the demonetization period but even before and after also. We find that amount of cash deposited before demonetization period was Rs. 7,85,000/- and after demonetization period up to 31.03.2017 was Rs. 1,06,48,000/....
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....ngly, he has taken the view that the above said amounts represents unexplained money of the assessee. I am unable to understand the rationale in the view taken by A.O. I noticed that the AO has invoked the provisions of sec. 68 of the Act for making this addition. I also noticed that the assessee has also complied with the requirements of sec. 68 of the Act. The AO has also not stated that the assessee has not discharged the responsibility placed on it u/s 68 of the Act. Peculiarly, the AO is taking the view that the assessee was not entitled to collect the demonized notes and accordingly invoked sec. 68 of the Act. I am unable to understand as to how the contraventions, if any, of the notification issued by RBI would attract the provisions....
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....y sales carried out by the assessee as recorded in the books of accounts. Therefore, the source of cash is duly explained. The provisions of Sec. 68 could be invoked only in cases when there was unexplained cash credit in the books of accounts maintained by the assessee. However, the assessee has duly identified the debtors from whom the cash was received and the same could not be disputed by lower authorities. The PAN of respective debtors as well as quantum of cash realized from each of them has duly been detailed by the assessee before Ld. AO during assessment proceedings. No defect has been pointed out in the books of accounts. In such a case, the credit could not be held to be unexplained cash credit and the impugned additions are not ....
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....sclosed sources. Tire Hon'ble Vishakapatnam Tribunal in tire case of ACIT Vs. Hirapanna Jewelers in ITA No. 253/Viz/2020 on identical facts held that when cash receipts represent tire sales which tire assessee has offered for taxation and when trading account shows sufficient stock to effect the sales and when no defects are pointed out in tire books of account, it was held that when Assessee already admitted tire sales as revenue receipt, there is no case for making tire addition u/s 68 or tax tire same u/s 115BBE again. I am of tire view that in tire light of tire facts and circumstances of tire present case, tire addition made is not sustainable and tire same is directed to be deleted." [Emphasis Added] 2.3. The present case in....