2025 (11) TMI 1585

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...."NFAC"), Delhi vide order dated 30.04.2024 passed for A.Y. 2017-18. 2. The assessee has raised the following grounds of appeal: "1.1 That the ld. CIT(A) has erred in confirming the addition of Rs. 1,01,94,386/- made by the assessing officer in respect of cash deposited during demonetization period. 1.2 That the various reasons advanced by ld. CIT(A) in upholding the additions are contrary to the facts of the case and evidence on record. 1.3 The appellant respectfully submits that he has deposited cash out of cash sales and all the evidences have been filed by the appellant. Therefore, no addition can be made for Rs. 1,01,94,386/- and in particular when the source of cash deposited is out of sales which is alrea....

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....invoices did not have proper details, and cash receipts were backdated to inflate the opening balance for F.Y. 2016-17. Further, the Assessing Officer noted an inconsistency of Rs. 9.37 lakh in the opening cash balance, as books showed opening balance of Rs. 14.48 lakh against the correctly reported Rs. 5.11 lakh from the previous year's return. The assessee submitted that this was on account of clerical errors, but the AO rejected the assessee's explanation, on the ground that audited books in both years could not reflect such discrepancies. As per the Assessing Officer, the increase in cash sales during the months immediately before demonetization, the lack of customer verification for large cash receipts, and mismatches in accounting ent....

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....6, the assessee made no corresponding cash deposits in the bank accounts during that time, casting serious doubt on the credibility of the explanation given by the assessee. Further, CIT(Appeals) noted that the difference in the opening cash balance of Rs. 9.37 lakh-shown as Rs. 14.48 lakh instead of Rs. 5.11 lakh could not be convincingly explained by the assessee, especially since both the current and previous year's books were audited and such a significant error was neither identified nor corrected earlier. The CIT(A) also held that merely providing names, dates, and amounts of cash receipts was insufficient to discharge the onus cast upon the assessee under Section 68 of the Act. CIT(Appeals) was of the view that the assessee failed to....

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....ng cash balance of Rs. 9,37,169/-. Having considered the submissions of both parties and perused the material available on record, we find that the assessee has adequately explained the source of the cash deposits. The assessee has consistently contended that the cash deposits were out of genuine cash sales, which were duly recorded in the books of account maintained in the regular course of business, supported by cash memos and invoices. These sales were also reflected in the VAT returns filed and accepted by the VAT department. The audit under VAT and its finalization in Form 304 further corroborate the genuineness of these transactions. The total turnover for the year under consideration was Rs. 12.12 crores as against Rs. 11.93 crores i....