TaxTMI 
TaxTMI 
2025 (6) TMI 42
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..../- out of which the Specified Bank Notes (SBNs) deposited in the demonetization period amounted to Rs. 2,65,51,000/-. Ld. AO observed that as per the Gazette Notification dated 08.11.2016 and 13.11.2016 only the Public Sector Oil and Gas Marketing companies are allowed to accept the SBNs for sale of Petrol, Diesel and Gas but the said Notification was not applicable on the Authorised dealers of Private Companies. Ld. AO after examining the records further noticed that out of the deposit of SBNs deposited during the demonetization period, closing cash balance as on 08.11.2016 at Rs. 28,17,815/- deserves to be excluded and the remaining amount of Rs. 2,38,22,185/- has been added in the hands of assessee as unexplained money u/s.69A of the Act along with invoking the provisions of section 115BBE of the Act. 3. Aggrieved assessee preferred appeal before ld.CIT(A) but failed to succeed. Now the assessee in appeal before this Tribunal. 4. Ld. Counsel for the assessee submitted that the issue is squarely covered in favour of the assessee by plethora of decisions including that in the case of ITO Vs. M/s. Ashapura Petrochem Marketing Pvt. Ltd. in ITA No.511/Ahd/2020 order dated 18.10.202....
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....arious decisions has held in favour of the assessee and deleted the addition made u/s.68 of the Act observing as follows : "7. We have given our thoughtful consideration and perused the materials available on record including the Paper Book filed by the assessee. The addition made by the Ld. Assessing Officer of Rs. 1,24,59,500/- u/s. 68 of the Act mainly on the ground that the assessee was not authorized to accept Specified Bank Notes during demonetization period as observed in the assessment order. Thus it is an admitted fact that the cash deposit is on account of sale of petrol, diesel and other petroleum products. These sales have been duly recorded in the books of accounts and appropriate VAT taxes also collected by the assessee. The Manager of the assessee company also filed a Notarized Affidavit dated 29-03-2017 accepting the above facts during the course of assessment proceedings. Thus it is clearly established that the Ld. A.O. on one side accepting the source of cash deposit and on the other side, he is making the cash deposit as unexplained cash credit which is self-contradictory. The Assessing Officer following the Circular dated 08-11-2016, which is not applicable si....
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....ot rejected the turnover of the assessee, but has treated the same as unexplained only for the reason that the assessee has not produced the prescriptions and the identity of the persons who bought the medicines with regard to the sales made. The id. AR further submitted that the accounts of the assessee are audited and there is no discrepancy found during the audit. It is also contended by the Id. AR that the assessee has produced all the details with regard to the sales including the ledger accounts, cash book, VAT returns etc, during the course of assessment and the AO did not reject the books of accounts of the assessee. The Id. AR drew our attention to the relevant Notification wherein it is stated that for making payments in all Pharmacies on production of Doctor's prescription and proof of identity, however, there is no mandate given that the Doctor's prescription and identity of persons purchasing the medicines need to be kept for record. The Id. AR also placed reliance on the decision of Vishakapatnam Bench of the Tribunal in the case of Hirapanna Jewellers V. ACIT in ITA No.253/Viz/2020 dated 12.05.2021, where it is held that once the assessee admits the sales as ....
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....rovisions of section 115BBE of the Act. 3.11 From the above it is clear that the assessee has made cash deposits in bank accounts out of unexplained cash u/s. 68 and tax rates applicable as per provisions of section 115BBE of the Act. Hence, I am satisfied that this is a fit case for initiation of penal proceedings u/s. 271AAC of the Act." 13. From the above it is clear that the AO is not questioning the source of the cash deposit since he has recorded a finding that cash sales during the demonetization period is brought to tax u/s. 68 which makes it clear that it is admitted fact that sales is the source for cash deposits. The revenue is contending that there is a requirement as per the Circular that the Doctors prescriptions and identity of the persons purchasing medicines needs to be kept in record to substantiate the cash sales during demonetization period. However, from the plain reading of the said Circular, there is no specific mention as contended by the department. Further, the AO did not reject the books of accounts of the assessee and has not brought anything contrary on record to show that cash sales is not the source for the cash deposited during demonetization p....