TaxTMI 
TaxTMI 
2025 (5) TMI 2050
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....on of Rs. 91,77,000/- on account of cash deposit during demonetization period.? 2. Whether, on the facts and circumstances of the case and in law the Ld. CIT(A) was right in deleting the additions of Rs. 91,77,000/- without appreciating that the parties to whom cash sale was made had not filed any response in pursuance to notices u/s 133(6) of the Act during Assessment proceedings? 3. The appellant craves leave to add, alter, amend, append or delete any of the above grounds of appeal." 3. Briefly stated, the facts of the case are that the assessee is engaged in the manufacture of white crystal sugar of molasses from sugarcane and production of ethanol, liquor, and CO2 gas. The assessee filed its return for A.Y 2017-18 declaring a total....
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....VAT returns reconciled with financials. The ld. counsel for the assessee contended that the Assessing Officer overlooked that the cash deposit stemmed from earlier bank withdrawals as well as out of cash sales made pursuant to the Government's directive dated 08.09.2016 for sugar stock liquidation, a distress sale accepted by the CIT(A) and never disputed by the Assessing Officer. It is the say of the ld AR that section 68 is not applicable in the present case as the assessee had duly explained in detail the source and legitimacy of the cash deposits made during the demonetization period. 8. The ld. counsel for the assessee further submitted that the Assessing Officer without conducting any independent inquiry, proceeded to make an add....
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....of cash deposit, it's contentions to prove the source, hardly deserves to be accepted in entirety especially when the AO's notice u/s 133(6) to the Buyers who purchased sugar in cash, all but one, did not respond. One buyer Mr Saksham Agarwal who responded, as per the assessee had purchased 11,58,000/- worth of sugar in cash, but he confirmed having purchased sugar in cash worth only Rs 750/-. On the other hand, the Revenue's endeavour to disbelieve the assessee's contention that cash deposits have been made out of cash withdrawals from bank as well as sales due to a government directive, cannot be fully justified on the basis of comparative cash deposits of previous year. In this factual matrix, there is some element of failure to explain ....