TaxTMI 
TaxTMI 
2025 (9) TMI 787
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....essment year 2017-18. 2. In the appeal, the assessee has raised the following grounds: - "The National Faceless Appeal Centre (hereinafter referred to as the CIT(A)) erred in upholding the action of the Income-tax Officer - 3, Palghar (hereinafter referred to as the Assessing Officer) sustaining the addition under section 69A of the Act of Rs 20,78,239, being 75 per cent of aggregate cash deposited in the bank accounts, as against the addition made by the Assessing Officer of Rs 27,70,985. The appellant contends that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have sustained the impugned addition inasmuch as the CIT(A) has not appreciated the facts of the case in its entirety. ....
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....mitted that she had deposited cash of INR 25,55,000 during the demonetisation period in her accounts, details of which are as follows: - Sr. No. A/C No. Amount 1 024354023912 900000 2 024354023928 1070000 3 024354023930 585000 Total deposits 25,55,000 5. As per the assessee, the cash deposited in her bank accounts was out of the dairy business and the sale of buffaloes/live stocks. In support of the aforesaid submission, the assessee submitted a confirmation letter of sale of livestock. It was further noticed that all the accounts are loan accounts in which cash was deposited as loan repayment during the demonetisation period. During the assessment proceedings, the assessee also submitted the loa....
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....assessee to substantiate the permission taken from the bank regarding the sale of live-stock under hypothecation. Accordingly, the AO made the addition of the entire cash of INR 27,70,985 deposited by the assessee during the demonetisation. By treating the same as unexplained money under section 69A of the Act. 7. The learned CIT(A), vide impugned order, granted partial relief to the assessee and restricted the addition to 75% of the cash deposits made during the demonetisation period on the basis that data availability of cash from the sale of milk cannot be ruled out despite several inconsistencies in the assessee's submissions. Being aggrieved, the assessee is in appeal before us. 8. During the hearing, the learned Authorised Repre....
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....he live-stock sold by the assessee was under hypothecation with the bank in respect of loans taken by the assessee for its business purposes. In order to substantiate its submission that the cash deposited during the demonetisation period was partly from the sale of live-stock, the assessee has placed on record the confirmation letters issued by the purchasers along with their Aadhaar and PAN card. Further, the assessee has also placed on record the following statement of cash inflow from trading activity during the year under consideration: - Ranjana Sanjay Tiwari Ass Year: 2017-18 Statement of Cash inflow from Trading Activity Inflow Income Cash Bank Total Sales of Milk 37,53,221 1,00,000 ....
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....t the cash flow from the trading activity of milk shows gross receipts of INR 28,53,221, against which a total of INR 14,27,205 was incurred by the assessee towards various cash expenses. Thus, the learned CIT(A) noted that the net cash inflow of the assessee was INR 23,26,016 during the year under consideration, resulting in net profit from the sale of milk of INR 3,41,202. Furthermore, the learned CIT(A) noted that the assessee's cash book shows a periodical outflow of expenses for milk sales and periodical deposits of milk sales income. Further, it is noted on page 6 of the impugned order that there are significant inflows in the second half of October and the first week of November 2016. However, despite recording the aforesaid fact....
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....ce as to their identity. It is the plea of the assessee that the assessee sold the live-stock and repaid the loan taken from the bank. We find that this submission is duly supported by the AO's own finding in para-8 of the assessment order that all the accounts in which cash was deposited by the assessee were loan accounts and the cash was deposited as loan repayment during the demonetisation period. Once the AO has recorded the aforesaid facts, we do not find any merit in the emphasis laid on hypothecation of live-stock for availing the loan, which, as noted above, was repaid by the assessee. Therefore, after repayment of the loan, the hypothecation has no relevance. Even in the event of a breach of the hypothecation condition, the bank ma....