TaxTMI 
TaxTMI 
2024 (12) TMI 519
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.... the source of cash deposited during demonetization was from 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 As....
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....ctfully it is submitted before your honour that addition u/s 69A of the Act made by the AO which is sustained by the Ld CIT(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....
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.... prevailing practice of depositing cash to the bank in earlier assessment years as well as succeeding assessment years. 8. Hon'ble Sir, the entire cash deposits made during the demonetization period, into the C/c bank account were sourced Out of the Closing Cash in hand balance 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 de....
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.... 9. Hon'ble Sir, during the Financial year 2016-17, a total of Rs. 22,40,000/- was deposited into the bank. Out of this total, Rs. 13,50,000/- (i.e. Rs. 22,40,000 minus Rs 8,90,000) was accepted by both the AO and the Ld CIT(A) as business turnover for the pre-demonetization and post-demonetization periods, additionally, a partial cash deposit of Rs. 2,00,000/- 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,....
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....les are not disputed by the revenue. (Ref Page 32 of J-PB) 2. Ramesh Kochar v. ITO (ITA No. 171/Del/2022): The Delhi ITAT SMC Bench, pronounced on April 26, 2022, that if sales have already been accepted as revenue receipts, they cannot be added again as income. This decision underscores that once a revenue receipt is acknowledged, it should not be subjected to double taxation by reclassifying it as income. (Ref. Page 33-45 of J-PB) 3. Jaspreet Kaur 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....
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.... c) The Cash expenses, supported by Cash vouchers, were provided to the AO. Despite this, the AO hypothetically estimated expenses amounting to Rs 4,22,655. There is no whisper in the order regarding the utilization of this estimated amount. d) The cash balance of Rs 12,09,023/- as of November 8, 2016, derived from documentary evidence, matches exactly with the amount recorded in the Cash Book. 15. Regarding the deposits made in parts, it was submitted during the assessment proceedings, as detailed in the submission dated March 14, 2022 (refer to Para 13, page 4 of the Reply 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% a....
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....e sales in cash deposits with the earlier assessment years without bringing on record anything against the assessee for making cash sales and cash deposits, in our considered view, the assessee has explained the source of cash deposits and rightly offered to tax in its books of accounts, therefore, it does not call for separate disallowance. Further, considering the detailed findings of the Ld. CIT(A), we do not see any reason to disturb the same. Accordingly, ground raised by the Revenue is dismissed". (Ref. Page 93-123 of J-PB) 17. As regards not mentioning name and addresses of purchaser on Cash bills, it is submitted that entire cash bills issued during the FY 2016-17 were within the range of Rs 9,500/- to Rs 19,854/-. Entire bills 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 ....