TaxTMI 
TaxTMI 
TaxTMI 
2024 (8) TMI 566
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....scrutiny assessment and a notice under section 143(2) was issued and served upon the assessee. The ld. Assessing Officer has passed the assessment order under section 143(3) on 13th November, 2019. The ld. Assessing Officer has made the addition of Rs. 99,32,750/- on account of unexplained cash credits deposited in the various Bank accounts of the assessee. Dissatisfied with this addition, the assessee carried the matter in appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) has partly allowed the appeal of the assessee and confirmed the addition of Rs. 40,36,676/-. The ld. CIT(Appeals) has reduced the addition of Rs. 58,96,074/- from the total addition made by the ld. Assessing Officer. 4. With the assistance of ld. Representatives, we have gone through the record carefully. A perusal of the record would indicate that the assessee has filed written submission before the ld. CIT(Appeals), which exhibits the complete analysis of the issue and we deem it appropriate to take note of such submission for appreciating the controversy involved therein. Such submission reads as under:- "5.2. During appellate proceedings, the appellant has submitted his written submission dated 21.0....
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....- - 49,51,800.00 2. Axis Bank (A/c No. 913030050962370) 53,36,100.00 40,23,380.00 52,80,950.00 3. Bank of Baroda - 4,26,480.00 - Total 53,36,100.00 44,49,860.00 1,02,32,750.00 Cash deposited into the above banks are out of cash in hand as on 08.11.2016 and cash sales during the demonetization period i.e. from 09.11.2016 to 30.12.2016 and during the F. Y. 2016-17 [Copy of Cash Book of F. Y. 2016-17 is being enclosed as Annexure: E, Pgs: 1 to 51] Since there had been an increase in the overall scale of business of the proprietorship over the years, so a corresponding increase in the cash deposits during the relevant period on Year to Year basis is also reasonable. Segregation of Cash Deposits made during demonetization period i.e. 09.11.2016 to 30.12.2016 based on currency notes[SBNs and Legal New Currency]: SI.No. Name of Bank Deposits made in Specified Bank Notes (SBNs) (Rs.) Deposits made in New Legal Notes(Rs.) Total (Rs.) 1. State Bank of lndia (A/c No. 35713331897) 48,83,500.00 68,300.00 49,51,800.00 2. Axis Bank(A/c No. 913030050962370) 5,74,000.00 47,06,950.00 52,80,950.00 Total 54,57,500.00 47,75,250.00 1,02,....
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....ount was out of cash in hand and cash sales. Cash books, sale register and bank statements were produced before the Ld. A.O. and all explanation was given to the ld. A.O. The assessee categorically stated that all cash deposits were made out of sales/turnover of the business only. The ld. A.O. admitted the sale and purchase as per books of the assessee. Therefore, the ld. A.O. accepted the books of accounts of the assessee". 5. Before adverting to the finding of the ld. CIT(Appeals), we would like to take note of the finding recorded by the ld. Assessing Officer to find out as to how such an explanation was appreciated by him for disbelieving the stand of the assessee. The finding from paragraph no. 3.1.5 of the assessment order is the relevant finding, which reads as under:- "3.1.5. From the above facts it is clear that cash deposit trends of the assessee during demonetization period and in earlier few months is abnormal. It is also not at par with the earlier year or subsequent year. From the sales & purchase details, it is very much clear that sales & purchase were within the close associates & relative of the assessee and within is well control. The above fact clearly indica....
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.... is observed that there is increase in sales of the appellant in past three years. However, the increase in cash deposits during the demonetization period is much higher than the corresponding increase in sales. Since the trade of the appellant fell in essential commodities, it is acceptable that people might have paid in SBN during the demonetization period for purchase of medicine, but despite this the total cash deposits should correspond to the increase in sales. Further, the increase in cash balance in cash book should also be supported by the comparative data of monthly cash balance. It is important to note that the appellant during the assessment proceedings and also during the appeal proceedings has failed to provide any vouchers etc. in support of its contention of proving the cash sales. Hence taking into consideration the overall picture of the case I find it appropriate to allow the benefit of the cash deposited in bank during the demonetization period on pro-rata basis corresponding with the increase in turnover ratio of sales during the pre-demonetisation period. It is noted that the appellant has registered an increase in sale from the period April to December in FY ....