2025 (1) TMI 1630

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....rchased milk from AMUL centre and sell to other retailers. From the sale of milk, the assessee received cash which was deposited into his bank account for making payments to AMUL. From the deposited amount, the payments are made to AMUL through cheques. These are normal business practice adopted by the milk suppliers. Assessee filed its return of income declaring total income of Rs. 5,35,836/-. The assessment of the assessee was completed under section 144 of the Income-tax Act, 1961 (for short 'the Act') vide order dated 20.04.2021 assessing the total income at Rs. 10,78,05,316/-. The case was selected for scrutiny through CASS in order to verify the large cash deposited in the bank during demonetization period and notice was issued to the....

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....conclusion and inferences drawn by the Ld. Assessing Officer are based on suspicious, conjectures, surmises and irrelevant consideration in adopting wrong yardstick in holding that the cash deposits are nothing but income from undisclosed sources. What is to be subject for taxation is only real income over which the assessee possesses a right and not any other thing. 3. That the Ld. CIT(A) has erred on facts and in law in confirming the order of the Assessing Officer in questioning the source of cash deposits when all the purchases are made using the cash sales of AMUL milk and products deposits into bank account and making payment to AMUL entirely from the bank account. 4. That the Ld. CIT(A) has erred on facts and in law....

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....UL from the cash deposits made by the assessee out of the collection of sale of milk. We observed that similar issue was considered by the coordinate Bench in the case of Mohammad Daud vs. ITO ITA No.1691/Del/2022 and it was held that coordinate Bench considered the issue of penalty u/s 271B of the Act on the cash deposit made by the assessee who happened to be a milk trader who collects cash on sale of milk and milk products in the assigned areas and earns fixed commission. Even though the issue raised in these appeals relating to section 271B still on merit whether the assessee has the source of income through milk distribution and when the assessee does the activities throughout the year and consistently deposited the cash and remits the....