AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 1064
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.... confirmations from sundry debtors, the addition, based merely on suspicion without any cogent evidence or independent inquiry, is unjustified and unsustainable. 3. The Ld. CIT(A) failed to appreciate that the assessee had uploaded 28 confirmations during the assessment proceedings and subsequently submitted 31 more confirmations along with details of cash and credit sales during the appellate proceedings, all of which substantiated that the cash deposits were from identifiable and verifiable sources, and no adverse finding was recorded regarding the genuineness of the debtors. 4. The Ld. CIT(A) failed to appreciate that the cash deposits included Rs. 42,47,000/- in Specified Bank Notes and Rs. 53,79,300/- in other denominations, and erred in treating the entire Rs. 96,26,300/- as unexplained without examining the nature and source separately, making the addition arbitrary and unjust. 5. The Ld. CIT(A) failed to consider that the appellant maintained regular books with sufficient cash balance on the dates of deposit, therefore without rejecting the books or invoking Section 145, the addition under Section 68 was upheld despite the deposits being duly reco....
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.... assessee. 5. Aggrieved with the order of Ld. CIT(A), the assessee is in appeal before this Tribunal. At the outset, it was submitted that the assessee is pressing only the sole issue on account of the addition of Rs.96,26,300/- made by the Ld. AO under section 68 of the Act. In this regard, the Ld. Authorised Representative ("Ld. AR") submitted that although the assessee had deposited a total cash of Rs. 96,26,300/- in his bank accounts during the demonetisation period, the entire cash was not in Specified Bank Notes ("SBNs"). Out of the total Rs. 42,49,500/- represented SBNs, while Rs. 53,76,800/- was in new currency notes. He further submitted that the assessee had a cash balance of Rs. 43,36,150/- as on 08.11.2016, out of which the SBNs of Rs.42,49,500/- were deposited during demonetisation, and the remaining deposits in new notes were out of regular collections from sundry debtors on account of business sales. It was contended that the total cash deposits were duly recorded in the books of account, which were audited by a Chartered Accountant. The Ld. AR drew our attention to the audited financial statements for A.Y. 2016-17 and A.Y. 2017-18 placed at page nos. 15 to 37 of ....
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....er section 133(6) of the Act to verify the confirmations directly from the debtors, even though the names, addresses, and in several cases, PAN of debtors were available on record. Relying on the decision of this Tribunal in Ambabhavani Jettem v. ITO (ITA No. 604/Hyd/2024, A.Y. 2017-18, order dated 07.07.2025), where under identical facts the addition on account of cash deposits during demonetisation was deleted, the Ld. AR prayed for deletion of the addition made under section 68 of the Act. 6. Per contra, the Learned Departmental Representative ("Ld. DR") relied on the orders of the lower authorities and submitted that the assessee failed to produce adequate confirmations or supporting evidence such as bills and vouchers. He argued that both authorities has recorded concurrent factual findings, and therefore, the matter may be remitted back to the file of the Ld. AO for fresh verification. The Ld. DR placed reliance on the decision of the Hon'ble Orissa High Court in Pankaj Gupta v. PCIT (477 ITR 387), order dated 03.12.2024, the SLP against the which was dismissed by the Hon'ble Supreme Court on 16.05.2025 [175 Taxmann.com 238 (SC)], wherein the Hon'ble Court has ....
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....onable basis of realisation of cash from sundry debtors. No abnormal variation has been found in this regard. Further, we have also examined the monthly cash deposit statements for the financial years 2015-16 and 2016-17 placed at page nos. 79 and 80 of the paper book, which is to the following effect: V.N.ENTERPRISES, D.NO.9-181, V.N.COMPLEX, SUBASH ROAD, ANANTAPUR - 515 001. Cash Deposits in Banks Monthly Summary 1-Apr-15 to 31-Mar-16 Credit Opening Balance April 71,21,000.00 May 73,34,000.00 June 91,06,771.00 July 79,00,000.00 August 62,91,500.00 September 95,20,000.00 October 1,08,53,500.00 November 1,09,30,000.00 December 1,25,70,000.00 January 1,26,25,000.00 February 83,15,000.00 March 85,65,000.00 Grand Total 11,11,31,771.00 V.N.ENTERPRISES, D.NO.9/114, V.N.COMPLEX, NEAR CLOCK TOWER, ANANTAPUR - 515001 CASH DEPOSITS Monthly Summary 1-Apr-15 to 31-Mar-17 Particulars Credit Opening Balance April 5505000.00 ....
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....t no.5020001854628. Hence, the same is accepted. But with regard to the accounts at S.No.2 & 3 above, the assessee failed to furnish either the confirmations from the Identifiable persons with or without PAN or bill / vouchers with regard to the sundry debtors. Therefore, the total cash deposits of Rs. 96,26,300/- made by the assessee during the demonitisation period in respect of the Indus Ind Bank Ltd. and HDFC Bank Ltd. is treated as Unexplained Cash credits u/s.68 of the Income Tax Act, 1961 and brought to tax u/s. 115BBE of the Act. 7.3 On perusal of the above, we find that the Ld. AO concluded the entire issue in a single paragraph based solely on the allegation that the assessee failed to furnish confirmations of the debtors. Similarly, we have also gone through para no.4.1 of the order of the Ld. CIT(A) which is to the following effect: 4.1 Ground No.1: The appellant has challenged the addition made under section 68 of the Income Tax Act, 1961 of Rs. 96,26,300/ -: In the instant case the assessee deposited unaccounted cash amounting to Rs. 96,26,300/- in his bank account during the demonetization period. During the assessment proceedings, the assessee c....