TaxTMI 
TaxTMI 
2026 (1) TMI 805
X X X X Extracts X X X X
X X X X Extracts X X X X
....posits during demonetization period as compared to pre-demonetization period. The assessee is the proprietor of M/s. Sunny Jewellers dealing in sale of jewellery in gold and other precious metals, ornaments and has declared total purchase of Rs. 82,04,192/- and sale of Rs. 50,13,807/- in the return of income. During the year under consideration, assessee has deposited total cash of Rs. 45,23,500/-. During the demonetization period, assessee has deposited Rs. 43,73,500/- in the Axis Bank and Rs. 1,50,000/- in another account maintained in the same bank, the total deposit of Rs. 45,23,500/-. The AO observed that total cash deposit made by the assessee during the year pertains to demonetization period only. Since the assessee has made the deposits only during demonetization period and observed that the assessee had cash book as on 08.11.2016 with a cash balance of Rs. 4,57,741/- only and it is manipulated statement and not supported with evidences. When the assessee was asked to furnish sources of cash deposited during the year, in reply assessee submitted that cash deposited in bank are out of collection, cash balance in hand and cash withdrawals from banks. Further it is submitted t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e, deposited the amount so received in the bank account and observed that claim of the assessee for having the cash in hand is fake. Further he observed that assessee is not one of the entities authorized by Central Government to accept SBNs during demonetization period in exchange for goods/services. Considering the past profile of the assessee analyzed by him, no such quantum of cash deposited by the assessee. Accordingly, he invoked the provisions of section 69A of the Act to make the addition of Rs. 45,23,500/- and also invoked the provisions of Section 115BBE of the Act. 6. Aggrieved with the above order, assessee preferred an appeal before the NFAC, Delhi. It was submitted that cash deposited by the assessee was from past savings, cash in hand and received from cash sales. Assessee also filed detailed submissions before the ld. CIT(A) as under :- "The Ld. ITO has arbitrarily made an addition of Rs. 45,23,500/- without Considering the exact facts of the case that despite detail submission was made manually as well as online through our e- filing portal. Addition of Rs. 45,23,500/- made vide order is absolutely wrong because Ld. ITO has not at all gone through th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....00/- u/s 143(3) of the Income Tax Act, 1961 without analyzing the facts. The Order passed by the Ld. ITO is arbitrary, unlawful and against the cannons of natural justice. (I) Making an addition of Rs. 45,23,500/- on account cash deposited. The Ld. ITO has arbitrarily made an addition of Rs. 45,23,500/- without considering the exact facts of the case that deposited detail submission was made manually as well as online through our e- filing portal. Addition of Rs. 45,23,500/- made vide order is absolutely wrong because Ld. ITO has not at all gone through the details of source of cash generated submitted by us and for further reference the same are already available with Ld. Assessing Officer and we will again submit at the time of hearing. This is purely unjustified, unlawful and against the principles of audi alteram partem and natural justice and it is prayed to be deleted fully." 9. At the time of hearing, ld. AR of the assessee brought to our notice the findings of tax authorities. He submitted that the Assessing Officer had made addition u/s 69A. The Assessing Officer cannot invoke section 69A when the assessee had maintained books of acco....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sistently assessee has made the sales which was not disputed by the Revenue. Since the assessee has deposited the cash during demonetization period the provisions of section 69A were invoked. After considering the factual matrix on record, we observe that assessee is a small trader and purchases gold from his relatives and sales the gold and jewelries in cash which was supported by the details submitted before the tax authorities. We observe that Revenue has accepted the cash sales declared by the assessee and also cash generated by the assessee out of the same sales. Since the sales is already declared in the return of income invoking the provisions of section 69A is questionable considering the facts, in order to invoke the provisions of section 69A the relevant cash should have been found in the possession of the assessee, which is not recorded in the books of the assessee and nature/source is not satisfactorily explained by the assessee. We observe that in this case, the assessee has deposited the cash in bank during demonetization and the same are already recorded in the books of account, therefore, invoking of section 69A is not justified and in this regard, there are several....