TaxTMI 
TaxTMI 
2024 (12) TMI 519
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....m cash in hand as on 08.11.2016 originated from cash sales, supported with cashbook which was not challenged / rejected in the order passed by the AO, the Ld.CIT(A) NFAC passed the order erroneously by drawing his inference on the premise that the cashbook was rejected by the AO. 3. That the Ld. CIT(A) NFAC has erred in law and facts in confirming the order of the AO, when the cash deposited in bank during demonetization was duly recorded in audited books of accounts as cash sales and the AO has also not disturbed the audited book results purchases, sales turnover and closing stock. 4. That the Ld. CIT(A)NFAC erred in law & facts in sustaining the addition made u/s 69A when income from a source which is found to be recorded in books, has already been taxed; once as sales receipt and again as unexplained cash credit which would amount to double taxation. 5. The appellant craves leave to file additional grounds/arguments at the time of hearing." 3. Facts giving rise to the present appeal are that the assessee filed his return of income, declaring total income of INR 4,25,979/-. Thereafter, the Assessing Officer ("AO") received information regarding the depositing of cash amoun....
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....(A) cannot be made in respect of cash deposits recorded in the books of account. Hon'ble Sir, the provisions of Section 69A of the Act is applicable only where money, bullion, jewellery or valuable article is not recorded in the books of account. 6. The assessee is maintaining regular books of accounts which are duly audited by the Chartered Accountant. During the demonetization period the assessee deposited Specified Bank Notes ("SBN") of Rs 10,90,000/- in C/c A/c No. 6174010000360 with Oriental Bank of Commerce (which is assessee's only business bank a/c) as per detail herein under: Referral Page of Paper Book Sr.No. Date of Deposit Amount Deposited (in Rs. ) Which is C/c bank account Which is its Corresponding entry in Cashbook Whether Cashbook provided to AO and CIT(A) 1 10.11.2016 2,00,000 52 58 Yes 2. 15.11.2016 3,00,000 52 58 Ys 3. 17.11.2016 3,50,000 52 58 Yes 4. 15.12.2016 1,00,000 52 59 Yes 5. 17.12.2016 1,40,000 52 59 Yes Total 10,90,000 &nb....
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.... of Rs 12,09,023/- available as of November 8, 2016. This balance is duly recorded in the cash book, as per page 58 of the paper book. 8.1 All relevant documents as requisite by the AO, including the Cash Book, Sales Register, Cash Sale invoices, Cash expense vouchers, Bank statement, Audit Report and Balance sheet for the FY 2016-17 were provided. The accounts of the assessee were not rejected. Book results were accepted by the AO as well as Ld CIT (A) without disturbing sales, purchases, closing and opening stock, and no discrepancies were found in the Cash Book, which showed cash balance of Rs 12,09,023 as of 08.11.2016. 8.2 Since the cash in hand of Rs 12, 09,023 was available and duly recorded in cash book on 08.11.2016, and when the books of accounts were not rejected u/s 145(3), the presumption drawn by the AO that amount was deposited out of unexplained sources during demonetization is arbitrary and, therefore, there was no justification on the part of the AO to make an addition u/s 69A of the Act for the sum which is found recorded in books. 8.3 Reliance is placed on the judgment pronounced by the Hon'ble Apex Court in the case of Lalchand Bhagat Ambica Ram v. ....
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....0/- made on November 10, 2016, during the demonetization period, was also recognized as business turnover. However, the remaining cash deposit of Rs. 8, 90,000/- made during the demonetization period was treated as unexplained, despite there being no adverse findings related to purchases and stock. i) Pre-demonetization Period-(01.4.2016 to 07.11.2016) a) Cash deposited in Bank Rs 10,90,000 b) Cash deposits accepted by AO and CIT(A) Rs 10,90,000 ii) Post Demonetization Period - (01.01.2017 to 31.03.2017) a) Cash deposited in Bank Rs 60,000 b) Cash deposits accepted by AO and CIT(A) Rs 60,000 iii) During Demonetization Period- (08.11.2016 to 31.12.2016) a) Cash deposited in Bank Rs 10,90,000 b) Partial Cash deposits accepted by AO and CIT(A) Rs2,00,000 9.1 Reliance is placed on the judgment pronounced by the Hon'ble members of the coordinate Bench of the ITAT Delhi Bench 'H', New Delhi, in an identical case, Usmaan Khan v. ITO (ITA No. 1636/Del/2024) for the Assessment Year 2017-18, pronounced on 14.08.2024. The judgement held as follows:- Held: "On Perusal of the order of the Ld CIT(A) reveals that the amount of Rs. 6....
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....r v. ITO (ITA No.13/Del/2024): In a recent ruling dated August 8, 2024, the coordinate bench of ITAT Bench "C", New Delhi addressed a similar matter, adhering to the principle that sales, once recognized as revenue, should not be added again as income. (Ref. Page 46-50 of J-PB) 4. Anantpur Kalpana v. ITO (ITA No. 541/Bang/2021) AY 2017-18: ITAT Bangalore pronounced on December 13, 2021. (Ref. Page 51-58 of J-PB) 5. ACIT, Central Circle- 1, Visakhapatnam v. M/s. Hirapanna Jewellers (ITA No. 253/Vizag/2020) ITAT Visakhapatnam pronounced on May 12, 2021. (Ref. Page 59-76 of J-PB) 6. ITO Vs. M/s Zee Bangles Pvt. Ltd. (ITA No. 815/Mum/2022) ITAT Mumbai pronounced on July 18, 2023 held as follows: Held: "We find the AO has failed to justify in applying section 69A to the case of the assessee when the assessee itself declared the cash sales in its return of income duly recorded in the audited books of accounts maintained by the assessee. Therefore, the CIT(A) has correctly held that provision of Sec. 69A of the Act cannot be applied in respect of cash deposited which have been duly recorded in the books of account and had already been declared income in the return of income f....
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....y Book, which is placed at Page 96 of the Paperbook), that the banks were overcrowded with long queues. To ensure the safety of the funds, it was necessary for the assessee to make deposits in installments within the time period permitted by the Competent Authority. 15.1 In this context, reliance is placed on the judgment delivered by the Hon'ble ITAT, Delhi Bench "SMC", New Delhi in the case of Tilak Raj Anand v. ITO (ITA No. 1453/DEL/2021, AY: 2017-18, dated March 17, 2022). (Ref. Page 88-92 of J-PB) 16. As regards current year's cash deposit ratio of 48.66% against 11.52% & 10.52% of preceding and succeeding year respectively which is for the cash deposited in Nov & Dec to the whole year, The below furnished comparative charts would reveal to your honour that during the Financial Year 2016-17 there is an overall percentage decline in both the cash sales and cash deposited in bank when compared to its immediate preceding Financial year 2015-16. The decline of 66.97% in depositing Cash during the period of 1st April 2016 to 8th November 2016 was ultimately got deposited in bank during 9th November 2016 to 31st December 2016. a. Chart showing comparison of Total Sale....
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.... irrespective of cash bills or credit bills; were issued in an ascending Chronological Series. Further, there is no requirement under section 139A r.w. rule 114B to mention the name and identity of the purchasers where the sales do not exceed Rs. 2 lakhs, and in the case of assessee, the cash sale bill never exceeded even Rs 20000/-. No specific defect in books of accounts which were duly audited by Chartered Accountant was noticed by the AO. Books of accounts were not rejected u/s 145(3) by the AO. Book results were duly accepted without disturbing Sales, Purchase, opening and closing stock. Thus the erroneous inference drawn by Ld CIT (A) on the premise that the cashbook was rejected by the AO for the reason that there were no mention of names and addresses of the purchasers on the cash bills is unjustified. 17.1 Reliance is placed on the following judgments which suggests that books cannot be rejected merely for the reason that names and addresses of the purchasers were not mentioned in the cash bills. 1. The Pr. Commissioner of Income Tax, Rohtak v. Rajeev Aggarwal (ITA No. 35/2020), (P&H) pronounced on 15.01.2024 wherein, it was held "That the cash sales, cannot be doubt....