2025 (9) TMI 427

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.... the ld. AO u/s 69A of the Act on account of cash deposit during demonetization period. 03. The facts in brief are that the assessee filed its return of income on 27.09.2017, declaring total income at Rs. 27,19,120/-. Thereafter, the case of the assessee was selected for scrutiny under Computer Assisted Scrutiny Selection (CASS), for two reasons namely; (i) quantitative details of Principal items of goods of raw materials as well as finished goods as not submitted and (ii) large value of deposits during demonetization period. Accordingly, the statutory notices were duly issued and served upon the assessee. The assessee is engaged in the business of wholesale of fertilizers, pesticides and other goods. During the course of assessment proc....

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.... tender and were merely a piece of paper. Therefore, did not constitute money in legal tender. Finally, the ld. AO added the same u/s 69A of the Act i.e. unexplained money of Rs. 46,35,884/- in the assessment framed u/s 143(3) dated 16.11.2019. 04. In the appellate proceedings, the ld. CIT (A) simply dismissed the appeal. 05. After hearing the rival contentions and perusing the material available on record, we find that the assessee is carrying on the business as wholesale dealer, which is not doubted by the AO and the ld. AO accepted the same in Para 3 of page no.3 of the assessment order that assessee has in fact carried out sales during the demonetization period in cash and collected VAT wherever required and also reported the sale....

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....ot the job of the ld. AO to see whether the sales were made in terms of legal tender and it is in fact for Reserve Bank of India to take the action for the said violation of receiving the sales consideration in nonlegal tender post 09.11.2016 as the assessee has received the money in non-legal tender in SBN, in violation of the RBI Circular. The case of the assessee is squarely covered by the decision of the co-ordinate bench in the case of Vidyasagar Samabay Krishi Unnayan Samity Ltd. vs. ACIT, Circle 38, Kolkata in ITA No. 06/KOL/2024 for A.Y. 2017-18, wherein the co-ordinate bench has held as under:- "5. We have heard the rival contentions and gone through the record. In this case, the ld. counsel has explained that no cash sale....

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....he assessee was unexplained income of the assessee u/s 69A of the Act? The assessee has duly explained the source of deposits, which has also been accepted by the Assessing Officer. The only contention of the Assessing Officer is that the assessee has violated the notification of the Central Government dated 08.11.2016 and accepted the Specified Bank Notes in lieu of sales made. For that, it is for the competent authority who may take action against the assessee as may be provided/applicable in relevant law. However, for the purpose of either section 68 or 69 of the Act, the said deposits cannot be treated as unexplained income of the assessee. Our above view is fortified by the decision of the Coordinate Bangalore Bench of the Tribunal in ....