AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2024 (9) TMI 202
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..... Therefore, notice u/s. 143(2) of the Act was issued. Subsequently, notices u/s. 142(1) & u/s. 143(3) of the act were issued from time to time. In response, the appellant submitted his reply. During the assessment year the appellant had cash deposited in Bank account during the demonetization period. The appellant submitted that the cash deposit was out of routine regular daily collection of hospital treatment receipts and diet kitchen receipts from various patients. However, the AO did not satisfy with the submission of the appellant. Therefore, the AO made an addition Rs. 20,54,610/- of cash deposit of bank accounts u/s. 68 of the IT Act. Thus, the assessment was completed by Assessing Officer u/s. 143(3) by assessing the total income at Rs. 46,81,600/-. Aggrieved, assessee preferred an appeal before the ld. CIT(A). 3. Before the ld. CIT(A) the assessee submitted that books of accounts is duly audited under sec. 44AB of the Act. The assessee submitted that it is not disputed by the learned Assessing Officer that the said SBNs were the fee receipts of the hospital from the patients. The learned AO is not dissatisfied with the explanation for source provided by the assessee. When....
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....are to be accepted as they are. The ld.CIT(A) confirmed the action of the ld. Assessing Officer. Aggrieved, assessee is in appeal before the Tribunal. 4. Before us, the ld.Counsel for the assessee submitted case law paper book (Pages 1-59) and paper book containing 1-46 pages and referred details of cash deposit during the period 08.11.2016 to 30.12.2016 (pg 29); details of cash deposit in each Bank account for FY 2016-17 (PAN and Address of the person who made deposits) (pg 30-31); details of sales during FY 2015-16 (pg 32); details of sales during FY 2016-17 (pg 33); list of patients from whom cash was received (pg 38- 42) which contains name of persons, address, amount received, date of admission and date of discharge etc.; written submissions alongwith paper cuttings (Economic Times) which shows Government and Private Hospitals (pg 34-37). The ld.Counsel submitted that during the demonetization period of 10.11.2016 to 30.12.2016 a sum of Rs. 38,54,885/- was deposited in cash in Tamilnadu bank. The assessee deposited Rs. 23,49,500/- in SBN (denominations of Rs. 500 and Rs. 1000) out of Rs. 38,54,885/-. Aforesaid SBN deposit of Rs. 23,49,500/- was made partly out of the cash bal....
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....ee has filed necessary details (as mentioned in para 4 above) including list of parties from whom cash collected after demonetization period and deposited into bank account. The Assessing Officer is not disputing all these claims of the assessee including evidence filed in support of justification for source for cash deposit. But, the Assessing Officer has made additions towards cash deposit in specified bank notes after demonetization period only for the reason that the assessee is not eligible to transact or receive any specified bank notes after demonetization as per notification/GO issued by RBI and Government of India. The Assessing Officer, had discussed the issue with reference to GO issued by RBI and Government of India and concluded that since the assessee has accepted demonetized currency in violation of circular/notification issued by the Government of India, the source explained by the assessee cannot be accepted. In other words, the Assessing Officer never disputed fact that the assessee has made sales in cash before demonetization period and also realized cash from debtors against cash sales made before demonetization period. 7. We have also gone through the orders o....
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....lso can be taxed u/s. 115BBE of the Act, it is necessary to examine the case in light of business model of the assessee, and evidence filed during the course of assessment proceedings. 9. The provisions of section 69 of the Act, deals with unexplained investment, where in the financial year immediately preceding the assessment year, the assessee has made investments which are not recorded in the books of accounts, if any, and the assessee offers no explanation about the nature and source of the investments or the explanation offered by the assessee is not in the opinion of the Assessing Officer, satisfactory, then the value of the investments may be deemed to be the income of the assessee of such financial year. In order to invoke provisions of section 69 of the Act, two conditions must be satisfied. First and foremost condition is there should be an investment and second condition is the assessee could not explain source for said investment. In this case, if you go through evidence filed by the assessee including comparative details of amount collected out of sales for financial year 2015-16 & 2016-17 and details of cash deposit into bank for above financial years, we find that ....
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.... in specified bank notes and thus, the Assessing Officer is completely erred in making additions u/s. 69 of the Act. 10. Coming back to the observations of the Assessing Officer with regard to GO/notification issued by the RBI and Government of India, to deal with specified bank notes. The Assessing Officer is mainly on the issue of notification issued by the RBI to deal with the specified bank notes and argued that the assessee is not one of the eligible person to accept or to deal with specified bank notes and thus, even if assessee furnish necessary evidence, the assessee cannot accept specified bank notes after demonetization and the explanation offered by the assessee cannot be accepted. No doubt specified bank notes of Rs. 500 & Rs. 1000 has been withdrawn from circulation from 09th November, 2016 onwards. The Government of India and RBI has issued various notifications and SOP to deal with specified bank notes. Further, the RBI allowed certain category of persons to accept and to deal with specified bank notes up to 31st December, 2016. Further, the specified bank notes (cessation of liability) Act, 2017, also stated that from the appointed date no person can receive or ac....
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....e rejected. In our considered view, to bring any amount u/s. 69 of the Act, the nature and source of investment, needs to be examined. In case the assessee explains the nature and source of investment, then the question of making addition towards unexplained investment u/s. 69 of the Act does not arise. In this case, the source of deposits has not been disputed and has been created out of ordinary business sales which has been credited into books of accounts and profits has also been duly included in the return of income filed in relevant assessment year. Therefore, we are of the considered view that, additions cannot be made u/s. 69 of the Act and taxed u/s. 115BBE of the Act towards cash deposits made to bank account. 12. At this stage, it is relevant to consider certain judicial precedents relied upon by the ld. Counsel for the assessee. The Ld. Counsel for the assessee relied upon the decision of Delhi High Court in the case of Agson Global Pvt Ltd vs ACIT [2022] 325 CTR 001. The Hon'ble Delhi High Court held that additions made on the sole ground of deviation in the ratio of cash sales and cash deposits during the demonetization period with that of earlier period, is imprope....
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....etization period u/s. 69 of the Act. The ld. CIT(A), without appreciating relevant facts simply sustained additions made by the Assessing Officer. Thus, we set aside the order passed by the CIT(A) and direct the Assessing Officer to delete additions made towards cash deposits u/s. 69 r.w.s. 115BBE of the Act. 16. In the result, appeal filed by the assessee is allowed. 7. Similarly, the co-ordinate Bench in the case of Raju Dinesh Kumar vs. DCIT [2024] 159 taxmann.com 1598 (Chennai-Trib.) dated 19.01.2024 held as under: 9. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. The facts borne out from the record clearly indicate that the assessee is running a dhall mill and manufacturing various kinds of dhalls. The facts brought on record by the AO further indicated that the assessee procures various kinds of pulses from local market and manufacturing into various kinds of dhalls and sells to unregistered dealers in cash. The assessee has filed comparative cash sales and cash deposits into bank account for FY 2015-16 & FY 2016-17 and also cash sales and cash deposits for the month of October & November, 2015 an....
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....23, where the Tribunal after considering relevant facts has held as under: 7. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. In so far as addition of Rs. 6,62,783/-, we find that the assessee itself has admitted shortage of source in their cash flow statement filed before the AO. Therefore, from the above, it is undoubtedly clear that the assessee could not explain source for cash deposits to the extent of Rs. 6,62,783/- and thus, we are of the considered view that, there is no error in the reasons given by the CIT(A) to sustain additions made towards cash deposits to the tune of Rs. 6,62,783/-. In so far as addition of Rs. 20,40,000/- towards advance received from group concerns, it was an argument of the appellant that group concerns have paid advance in cash during demonetization period and deposited into IDBI bank account. In this regard, the appellant has filed necessary details including PAN nos. and confirmation letters from the group concerns to prove receipt of trade advance. The Assessing Officer has not disputed these facts, however made additions only on the ground that the assessee should not ha....
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....ter 08-11-2016. However, in the present case, the cash so received by the assessee is backed by 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 sustainable in law. 7. The SMC bench of this Tribunal in Mrs. Umamaheswari Vs. ITO (supra), on identical facts, deleted similar additions on the ground that the assessee had duly evidenced the source of cash deposit and therefore, addition could not be made u/s 68. Similar is another decision of SMC Raipur Bench in Rahul Cold Storage Vs. ITO (supra) whe....