TaxTMI 
TaxTMI 
2025 (8) TMI 905
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....43(2) on 11.08.2018 and thereafter, various notices were issued which were complied with by the assessee. The assessment was completed wherein it is alleged by the AO that the assessee has declared substantially high turnover for the month October and November, 2016 and thus, the cash deposited during the demonetization period was itself unexplained money and accordingly, out of total cash deposits of INR 99 Lakhs during the demonetization period, a sum of INR 77,64,353/- was added to the total income of the assessee. 3. Against this order, assessee preferred appeal before Ld.CIT(A) who rejected the submissions of the assessee and dismissed the appeal of the assessee. 4. Aggrieved by the order of Ld.CIT(A), the assessee preferred appeal before Tribunal wherein following grounds of appeal are taken:- "On the facts and in the circumstances of the case and in law the Ld. CIT(A) at NFAC, Delhi erred in confirming the following actions of the Assessing Officer- 1. determining taxable income at Rs. 91,68,387/- against returned income in a sum of Rs. 14,04,034/- u/s 143(3) of the Act; 2. treating the cash sales during the demonitization period of October a....
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....016 upto the date of demonetization just to cover up the source of cash deposited in SBN during demonetization period out of its undisclosed money and therefore, he requested for the confirmation of the order of lower authorities. 7. Heard the contentions of both the parties and perused the material available on record. In the instant case, it is seen that books of accounts of the assessee were duly audited and copy of the Audit Report alongwith audited financial statements were produced / submitted before the lower authorities. Further, purchase and sales registers alongwith relevant bill and stock inventory were also produced. The AO has not pointed out any specific defect or error in the purchase/sales bills produced by the assessee nor any inquiries were made for the parties with respect of sale declared by the assessee. The assessee has filed bills of sales during the month of October and November, 2016 in the Paper Book which were submitted before the AO, a perusal of which revealed that the assessee has stated the name and address of the buyer in the bills however, no effort was made by the AO for making verification of the same. It is further seen that the books of accou....
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....rd dissatisfaction as to why the explanation furnished by Appellant is not acceptable. As is evident that assessee not only offered explanation regarding nature and source of such credits but also substantiated the same with documentary evidences in the shape of Audited Financial Statements, Sale Register, Purchase Register, Stock Register and Cash book. No specific defects whatsoever has been brought out on record by the ld. AO in those evidences and books of accounts so furnished. Therefore, addition so made u/s 68 of the Act without finding out any specific defects in books of account and also without rebutting the evidences produced is unjustified. Thus provisions of section 68 of the Act are not applicable. 11. The Co-ordinate bench of Mumbai ITAT in the case of ACIT v. Ramlal Jewellers (P.) Ltd. Reported in [2023] 154 taxmann.com 584 (Mumbai - Trib.) under similar circumstances, deleted the addition made u/s 68 on account of cash deposit in SBN during the demonetization into bank by making following observations: "Section 68 of the Income-tax Act, 1961- Cash credit(Cash deposit in bank)- Assessment year 2016-17- Assessee-company was engaged in jewellery business -....
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.... order dt. 25.09.2024 has observed as under: 18. "Coming to the issue of stock movement and excess sales, we observed that the assessee has submitted relevant stock reconciliation and auditors report of stock movements and there is no negative stock movement which will indicate that the assessee has booked excess sales without there being proper purchases. 19. In our considered view, there are chances that during the demonetization period the regular customers may have choose to buy the spare parts and bearing by making payment by cash so that their excess SBN is transferred. We noticed that the credit sales has come down during this period and the sales of the assessee is more or less maintained during this period. Therefore, it shows that the changes in the patterns recorded in the sales are not abnormal. 20. Whether the recording of cash sales which is already declared in the books of account will attract the deeming provisions of sec.68 or 69A of Act. We observed that the assessee has declared all the cash transactions in its books of account and merely because the cash deposits are more during the demonetization period, whether the CIT(A) can invoke ....
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....aranwala Jewellers Vs. ITO (ITA No. 1540/Del/2022) dated 27.03.2023, wherein it was held as under: 22. "In the case in hand the reason for disbelieving the cash deposit is that the assessee has been deposited below Rs. 2 lakh in every transactions that lead to the conclusion of the Assessing Officer that the same has been done to avoid the application of provision of section 285BA read with Rule 114E of the Act. The said observation made by the Assessing Officer without any material in his hand. There is no prohibition under law to make sale transaction below Rs. 2 lakhs as such the assessee had at liberty to manage his own affairs. From the action of the assessee in raising the sales bill below Rs. 2 lakhs the Assessing Officer cannot interpret as the sale are bogus only to give colour to non-genuine transaction as genuine transaction. The evidence brought on record by the Assessing Officer are not enough to hold that sales were not genuine. More so, the other wing of the Govt has already accepted the sale transaction under VAT, hence, the Assessing Officer is precluded from making contrary findings on the issue when the sales are not doubted. The other contention of the ....
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....y the assessee is allowed." 15. The Co-ordinate Benches of ITAT, in the following case laws has held as under: [i] M/S Godwin Tourism Pvt. Ltd. V. DCIT 2024 (8) TMI 1173 (ITAT, Delhi), dated- August 21, 2024, held that- 19. "Considered the rival submissions and material placed on record, we observed that the assessee has submitted cash book in the Paper Book wherein assessee has received share application money on various dates and received the same by way of cash on verification of the cash book submitted before us. We observed that on various dates, the assessee has maintained sufficient cash which are out of share k withdrawals and it is substantiated that sufficient source application money and some bank of cash available with the assessee to make the bank deposit of Rs. 8 lacs. After considering the facts on record, we observed that assessee has sufficient cash in hands to make above said dash deposit. Accordingly, additions made by the Assessing Officer is deleted." [ii] ITO V. M/s J.K. Wood India Pvt Ltd, 2024 (1) TMI 1262, dated 03.01.2024, Hon'ble ITAT Delhi held that- 14. "We have given thoughtful consideration to the factual matrix discusse....