TaxTMI 
TaxTMI 
2025 (7) TMI 106
X X X X Extracts X X X X
X X X X Extracts X X X X
....017 declaring total income of Rs. 3,63,000/-. The return was taken for scrutiny assessment and a show cause notice was issued to explain the cash sales on 08-11-2016 of Rs. 94,90,890/-, whereas the assessee had stock of only Rs. 18,96,682/- and purchased stock on 11-11-2016 of Rs. 94,15,842/- from M/s. D.S. Jewellers. 3. The assessee filed a detailed reply dated 07-12-2019 explaining the stock register, purchase and sales register, cash book and SBN deposited in bank accounts. However the Assessing Officer was not satisfied with the explanation offered by the assessee and added cash deposit of Rs. 93,12,000/- as unexplained money u/s. 69A of the Act and demanded tax thereon. 4. Aggrieved against the assessment order, assessee filed an appeal before Ld. CIT(A) who has also confirmed the addition made by the Assessing Officer. 5. Aggrieved against the appellate order, the assessee is in appeal before us raising the solitary ground of appeal: 1. The learned Commissioner (Appeals) erred in confirming the addition of cash deposit of Rs. 93,12,000/- in Bank Account during demonetization period as income from undisclosed sources. 6. Ld. Counsel Shri Anil Kshatriya app....
X X X X Extracts X X X X
X X X X Extracts X X X X
....isclosed sources but on account of demonetization implementation. The Assessing Officer further not made verification with the supplier of Gold as well as purchasers of Gold. Thus the addition made by the Lower Authorities are liable to be deleted. 7. Per contra Ld. Sr. D.R. appearing for the Revenue supported the orders passed by the Lower Authorities and requested to confirm the addition. 8. Heard rival submissions and perused the materials available on record including the Paper Book and case laws filed by the assessee. The assessee claims that the cash deposit is on account of demonetization and in fact cash sales was essentially generated on retail sales to various customers which is duly reflected in the cash book maintained by the assessee. A copy of the computerized cash book was submitted before the Assessing Officer, during the course of assessment proceedings, which are duly audited with Tax Audit Report. The Ld. A.O. has not found any defect or discrepancy in the audited books of accounts. The assessee has proved with reference to corroborative material evidence in the cash deposits with retail sales bill, purchase bill with name of the customers. Thus the initial....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lability of KYC documents for sales, non writing of tag of the jewellery to the sale bills, nonavailability of CCTV footage for huge rush of public etc. The contention of the assessee that due to demonetization, the public became panic and the cash available with them in old denomination notes becomes illegal from 9-11-2016 and made the investment in jewellery, thereby thronged the jewellery shops appear to be reasonable and supported by the newspaper clippings such as The Tribune, The Hindu etc. It is observed from the newspaper clippings that there was undue rush in various jewellery shops immediately after announcement of demonetization through the country." 9.1 The Ld. AR also showed us that the assessee had achieved higher gross profit & net profit margin in comparison to preceding year which supported the assessee's case that the sales made on the night of demonetization was in pursuance of the excellent opportunity present to them. 10. In view of the above facts, in our considered view, when the sale proceeds of Rs. 93.12 lacs had been supported with book results & primary evidences, which were not disproved by the AO, and that the same had already been assessed by the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....w.s139(a)(5)(c) of the Act and there was no KYC required. Further the Ld.AR demonstrated the sample Tax Invoice below Rs. 2 lakhs in the demonetization period and the invoice contains, name and address etc. Further there is no significant increase in the cash sales out of total sales, whereas for F.Y.2016-17 it is @ 31.27% and in comparison to F.Y. 2015-16 @ 31.44%, the Ld.AR referred to the cash flow statement, cash book and demonstrated the details of deposits made out of the cash sales and the assessee has been consistently maintaining the stock of Rs. 68.07 crs for the F.Y 2015-16 and for F.Y 2016-17 it was maintained at Rs. 65.38crs and the cash sales are part of the stocks maintained which is not disputed. Further the addition has been made only on the basis that after demonetization, the demonetized notes could not have been accepted as valid tender. Since the cash sales proceeds/receipts received from the customers are reflected in the Audited Profit & Loss account as income and if the cash deposits are added under section 68 of the Act that will amount to double taxation once as sales and again as unexplained cash credit which is against the principles of taxation. The AO ....