2025 (8) TMI 117

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....evenue/Department has filed the present appeal. The facts in brief are that the Ld. AO (vide order dated 27.11.2019) has recorded a finding that there were large sums of money deposited as cash in the bank accounts during demonetization period. It is recorded in the assessment order that the said cash deposits could not be verified in the absence of books of accounts etc. which the assessee was required to produce before the Ld. AO. Thereafter, the Ld. AO proceeded to add Rs. 2,27,98,730/- u/s 69A of the Act. 1.2 Aggrieved with this action of Ld. AO, the assessee approached the Ld. CIT(A) whereby based on a comparison of deposits in cash for comparable 3 years period (09.11.2015 to 31.11.2017 to 31.12.2017) the deposits were found to be ....

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....ding of fact given by the Ld. CIT(A) in para 5.2.1 on pages 19,20, and 21 of the impugned order. The Ld. AR argued that once the entire receipts have been considered for the purposes of taxation then without rejecting the book results, the Ld. AO could not have made the impugned addition. 3. We have perused the documents before us and heard the rival submissions at length. To begin with the relevant findings of the Ld. CIT(A), deserves to be extracted since they would be relevant for deciding the issue at hand: "5.2.1. I have considered the submissions made by the Appellant. I have also perused the assessment order. I find that the AO has made the addition u/s 69A mainly on ground that the Appellant has failed to produce books o....

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.... (made during the demonization period). In the light of the above, please explain why the excess cash deposits made during the year specially during demonization period should not be treated as unexplained cash credit? Ans. It may be out of my cash sales during the year however I am unable to produce any documentary evidence." Thus, from above statement, it is clear that the Appellant has been stating that the cash deposits may be out of sales, however, relevant documents cannot be produced right now. In my considered opinion, the AO ought to have provided time to the Appellant for furnishing books of accounts, adhering to the principles of natural justice. Be that as it may, the fact remains that in spite of non-....

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....ds in FY 2015-16 and 2017-18. It can be observed from the details submitted by the Appellant that the percentage of cash deposits made during the demonetization period and the corresponding periods in FYs 2015-16 and 2017-18 is as under. 09/11/2015 to 31/12/2015: 77.12% (of total cash deposits) 09/11/2016 to 31/12 31/12/2016: 81.51% (of total cash deposits) 09/11/2017 to 31/12/2017: 78.57% (of total cash deposits) Thus, the cash deposits made during demonetization period does not vary much when compared with the corresponding periods from FY 2015-16 and 2017-18. The AO could have carried out these exercises either by calling such details from the Appellant or by obtaining relevant bank statements from the....