AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 574
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....facts of the case are, the assessee filed its return of income declaring an income of Rs. 1,39,10,450/- on 07.11.2017. The case was selected for scrutiny through CASS. The statutory notices under section 143(2) and 142 (1) of the Income-tax Act, 1961 (for short 'the Act') were issued and served on the assessee through ITBA portal. The Assessing Officer observed that assessee is engaged in the business of manufacturing and processing of milk foods. The Assessing Officer observed that the assessee has deposited Rs. 4,78,15,745/- in old currency during demonetization period. A separate notice u/s 142(1) dated 19.11.2019 was issued to the assessee asking for bank statements, VAT returns and details of cash deposits during FY 2015-16 and 2016-17....
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....h wise detail of cash sale in earlier year and failed to reconcile the same with sudden increase of the cash sale No details of any purchase made by the assessee and explanation wrt sudden increase in the purchase of milk and Milk products were forwarded in this regard. The assessee has also failed to explain that how the payment to those parties was made. The assessee failed to explain the quantity of the milk and milk products. No details wrt sudden addition/increase in new customer in the month of the Oct 2016 till November, 8th 2016 was found. The assessee has also failed to explain why cash was not deposited by the assessee on real time basis. Party wise details and bills to substantiate the cash sal....
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....of Rs. 53,51,020/- between cash sales and cash deposited regarding which assessee failed to furnish any explanation. Therefore, AO made a plea to that extent the addition should be sustained. The said remand report was also shared with the assessee and in response, assessee submitted detailed information, we are reproducing the relevant part of the submission as under :- "To reiterate, the impugned addition was made by the AO, solely on the basis of the details furnished by assessee itself in respect of cash deposits during demonetization period. The AO conveniently skipped other relevant parts of business information/s/details furnished which were directly pointing out that cash sales and cash deposits in bank was an integral. ....
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....ed sufficient supporting details and documents and also chart of cash sales and other cash incomings explaining such cash availability. 4. That the Ld. CIT(A) has erred in law and on facts by not providing any opportunity of personal hearing through video conference as mandate by CBDT instructions. 5. That ld. CIT (A) has erred in law and on facts in confirming the initiation of penalty proceedings u/s 271(1)(c) of the Income Tax Act, 1961." 6. Further assessee has also filed following additional grounds of appeal :- "2. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in partly confirming the addition made in the assessment order dated 29.12.2019 passed by the A....
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....s and cash deposited for the period of demonetization the tax authorities have added the difference of the above as undisclosed income u/s 68 of the Act. In this regard, he submitted that the tax authorities failed to verify the books of account and assessee had opening cash balance during demonetization. Further he submitted that the Assessing Officer itself has observed that before demonetization, assessee has done cash sales of Rs. 36.54 crores and cash deposit was Rs. 35.83 crores. He submitted that there is difference of cash balance between cash sales and cash deposit before the demonetization period. Even after adjusting certain expenditure, still assessee had opening cash balance. Further he submitted that assessee is into dairy bus....
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.... business expenses as dairy business being cash intensified enterprise. After observing the above, he further observed that during demonetization, assessee has deposited Rs. 4,78,92,325/- whereas achieved the total cash sales during the period of Rs. 4,25,41,305/-, therefore there is a difference of Rs. 53,51,020/-. Therefore, the assessee failed to furnish any explanation. We observe that the ld. CIT (A) also proceeded to sustain the above addition without considering the actual facts on record. We observe that before demonetization i.e. on 07.11.2016, the assessee had closing cash balance which was not considered by the lower authorities and also they themselves observed that there is a difference of Rs. 71.39 lakhs pre-demonetization per....