2025 (9) TMI 1429

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....de u/s. 69A representing the cash deposited in the bank account during the demonetisation period." Brief facts of the case are as under: 2. The assessee is company engaged in trading in steel items such as TMT bars etc. For the year under consideration the assessee declared income from business as well as income from other sources and filed its return of income by declaring total income of Rs. 48,36,153/- on 28/10/2017. The case was selected for scrutiny and notice u/s. 143(2) along with notice 142(1) was issued to the assessee. 2.1 One of the reason for selecting the case under scrutiny was to verify source of cash of Rs. 64,21,000/- deposited by the assessee during demonetisation period between 08/11/2016 to 31/12/2016 in Abhyuda....

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....he Ld.CIT(A) upheld the observations of the Ld.AO as no evidences were produced by the assessee to link the cash withdrawals with cash deposits. Aggrieved by the order of the Ld.CIT(A) the assessee is in appeal before this Tribunal. 4. The Ld.AR submitted that, assessee do not deny the fact that cash expenses during the year under consideration reduced as compared to the earlier years. He placed reliance on the monthly cash summary for immediately preceding assessment year as well as year under consideration, to submit that the cash deposited was form the withdrawals made by the assessee. He further submitted that, assessment year 2016-17 was reopened and that the returns filed by the assessee were accepted by the Ld.AO. He submitted ....

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....ing contrary evidence assessee the submission of assessee that the cash deposited during the demonetization is out of such cash withdrawn cannot be rejected. 4.4 On the contrary, the Ld.DR submitted that, there is no explanation offered by the assessee as to why sum of Rs. 16,11,250/- was withdrawn in the month of October when assessee already had cash of Rs. 51,23,828/- as opening balance for the month of October. The Ld.DR emphasised that the assessee is not able to satisfactorily explain as to why the said amount was withdrawan during October. 4.5 This Tribunal accordingly directed the assessee to furnish reconciliation of the cash utilised during the year under consideration vis a vis the immediately preceding assessment year. The....

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....erence of Rs. 17,53,484/-. 5.2 We therefore agree with the alternate plea of the Ld.AR that, the disallowance is to be restricted to Rs. 17,53,484/- being difference between the cash deposited during year less the reduction in total cash expenses during the year. Accordingly the grounds raised by the assessee stand partly allowed. In the result the appeal filed by the assessee stands partly allowed. Order pronounced in the open court on 22/08/2025 ============= Document 1 Head-wise % of cash expenses to total turnover Particulars AY 2016-17 [immediately preceding AY) Head-wise % of cash expenses AY 2017-18 (AY under consideration) to total turnover Turnover 1,094,981,880.00 1.100,476,316.00 Head of Expenses CASH ....