TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 905
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Based on these large cash deposits, case of assessee was taken for scrutiny. The AO after considering the submission made by assessee, was of the view that out of INR 6,18,04,580/- deposited in the bank accounts in SBN claimed as cash balance available with the assessee only INR 20 Lakhs is justifiable and balance amount of INR 6,18,04,580/- was added u/s 68 of the Act r.w.s. 115BBE of the Act in the hands of assessee as unexplained cash. 3. Against the said order, an appeal was preferred before the Ld.CIT(A) who vide impugned order dated 27.03.2024, deleted the additions so made. 4. Aggrieved by the order of Ld.CIT(A), Revenue is in appeal before the Tribunal by taking following grounds of appeal:- 1 (i) "On the facts & in the circumstances of the case, the Ld. CIT(Appeals) has erred in deleting the addition of Rs. 6,18,04,580/- made by the AO U/s 68 of the Income Tax Act, 1961 on account of cash deposits made by the assessee in his bank accounts, during the demonization period, exceeding the availability of the cash in hand as per Cash Book by the above amount. (ii) On the facts & in the circumstances of the case, the Ld. CIT(Appeals) has erred in deleti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed and Unsubstantiated Cash Balance: The CIT(A) ignored the core finding that the assessee's actual cash in hand, as reasonably inferred from the available records and business pattern, could not have exceeded Rs. 20,00,000. The claim of cash balance of Rs. 6,52,27,450 was unsupported by contemporaneous evidence and contradicted by the assessee's own financial flow. The AO had provided detailed reasoning-including mismatch with purchase payments reflected in Form 26AS and the absence of timely deposits prior to demonetization establishing that cash deposits of Rs. 6,18,04,580 during the period were far iii) Mismatch Between Form 26AS and Claimed Cash Position: As per Form 26AS, the assessee had made purchases of Rs. 14,31,39,639 up to 08.11.2016. The AO rightly noted that if such payments had been made, the remaining cash could not still be Rs. 6,52,27,450. The CIT(A)'s reliance on bank payments ignores the fact that cash flow sufficiency must still be demonstrated. (iv) Lack of Commercial Prudence and Human Probability: The AO reasonably questioned the rationale of keeping over Rs. 6.5 crore in cash without any deposits prio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2,27,450/-, this contention of the assessee is not correct due to the reason that nobody can dare to have such a large amount in his office or at home. The assessee should have deposited this amount in the bank to earn interest income and to secure the money. Therefore, this plea of the assessee cannot be believed and hence rejected. (ii) Further, from the cash book, it has been observed that assessee has not deposited the amount of cash sale into the bank and whole receipts stated to be kept at office. After demonetization, he has deposited cash of Rs. 6,38,04,580/- into the bank. No other amount has stated to be paid as apparent from perusal of cash book. When I perused the form No. 26AS of the assessee, it has come to notice that assessee has made payment of Rs. 14,31,39,639/- up to 8th November 2016 towards purchasing of liquor which includes TCS amounting to Rs. 14,31,396/-. Therefore, contention of the assessee that he had cash balance of Rs. 6,52,27,450/-is totally baseless and unwarranted. In the cash book, assessee has failed to mention this amount of Rs. 14,31,39,639/-. If this amount is subtracted from the total available cash as claimed by the assessee on 08.11....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 22653962.76 24528952.86 July 30551617.76 27809263.64 August 47187470.76 27019963.84 September 51956593.76 24634754.66 October 61394422.54 25472388.66 November 36122598.86 28186549.10 December 32605899.86 28901786.42 January 41651314.04 27515164.42 February 53796211.64 31833187.42 March 4522982.08 4818993.66 Total sale for the previous year 2015-16 was Rs. 395900192 and turnover for the financial year 2016-17 Rs. 449202554. This increase in turnover ratio of 13.5 percent is reflecting in our cash receipt and cash maintenance. Therefore, it is submitted that cash balance maintained is duly supported by business cash transactions and are not unrealistic figures. These figures fully comparable with previous year's figures. Therefore, it is requested that our cash deposited during demonetization period is to be considered as duly generated through genuine business transactions and are realistic keeping in view the nature of business, business requirement and volume of business. As regard to the comparison of AO to the Form 26AS up to 08.11.2016 amounting to Rs. 14,31,39,639/- inclu....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... accounts. Further, the appellant had also submitted day wise stock report, wherein the outflow of stock against sales was clearly reflected. Also, the appellant had produced documentation to demonstrate that its sales clearly matched with the sales declared for the purpose of Excise duty paid. The Learned CIT (A) NFAC Delhi has considered the reply and explanation of the Appellant and accordingly deleted the addition. Hence appellant is relied upon the order of CIT(A). It is prayed before your honor the ground of appeal of the department may kindly be dismissed." 7. Heard the contentions of both the parties and perused the material available on record. In the instant case, assessee claim that cash was deposited out of cash balance available in cash book as on the date of demonetization. Assessee is a liquor contractor and carried business under the name and style of M/s. Choudhary & Co. having license from the Haryana Government. The assessee made purchase of INR 43,64,74,160/- of the liquor and disclosed the sale of INR 44,92,02,554/- after claiming rebate and discounts. The average sale of the assessee per month comes to INR 3.74 crores from all the 43 branches. Howe....