TaxTMI 
TaxTMI 
2026 (2) TMI 1303
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.... cash deposit of Rs. 2,97,00,000/- in a single day on 12-11-2016 during the demonetization period which is 50.82% of the total cash deposited in one year. The assessee explained that these cash deposits originated from cash sales made in the ordinary course of business and due to public rush after the demonetization announcement, there was a surge in cash sales, however the same were duly recorded in the books of account, supported by cash book, invoices, VAT returns and audit reports. Further the assessee had opening stock of Rs. 4,56,05,500/- as on 01-04-2016 and closing stock as on 07-11-2016 (i.e. one day before demonetization period) of Rs. 5,82,38,482/-. Thus cash sales made was from the stocks available with the assessee. 2.1. This submission of the assessee was not accepted by the assessing officer on the ground that the cash in hand on 08-11- 2015 for A.Y. 2016-17 amounting to Rs. 23.63 Lakhs, whereas for the present Asst. Year 2017-18 amounting to Rs. 297.52 Lakhs, hence there is 1260% increase in cash on hand in comparison to previous year. Further, there is a steep fall in sales in subsequent period. The ratio of cash sales to credit sales was higher in pre-demonetiz....
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.... to maintain the name, address and other details of retail customers involved in cash sales and thereby such comparison of AO as attributable to cash sales data visa-a-visa cash deposits of pre-demonetization period/previous year with post-demonetization period/this year is contended as not maintainable and thereby pleaded to delete the addition as involving mere suspicions and presumptions of AO not to accept appellant claims. However, appellant as contended could not adduce any verifiable evidences to contradict the findings of AO as involving comparative analysis of cash sales as discussed supra. Further, appellant is contending cash sales as to be considered as involving genuine cash sales inspite of having not adduced any further evidences to substantiate such huge cash sales resulting in accumulation of cash on hand till the date of demonetization and depositing the same huge cash on a single day i.e. 12.11.2016 as observed by AO on such analysis of appellant claims. Appellant ought to have made available few medium to high cash sale invoices with such supporting proofs and confirmations from such parties with due reconciliation of stock workings etc. so as to adduce such pos....
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.... grossly erred in upholding addition made by AO for Rs. 2,97,00,000/- as unexplained money under Section 69A of the Act. 2.1 In law and in the facts and circumstances of the Appellant's case, the learned CIT(A) has grossly erred in upholding addition made by the AO without appreciating the fact that sales corresponding to cash deposited during the bank account is duly offered to tax in audited annual accounts. 3. In law and in the facts and circumstances of the case, the Assessing Officer has erred in computing demand after applying provisions of Section 115BBE of the Act when such provisions of the Act are not on statute on the date of depositing old SBN in bank account and such provisions cannot have retrospective effect. 4. The appellant craves leave to add, to alter, amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal. 5. Ld. Counsel appearing for the assessee submitted a detailed Paper Book consisting of sales register, stock summary details of cash deposit and quantity records of Diamond, Gold, Silver jewels and VAT returns maintained by the assessee. It is submitted that the cash ....
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....Per contra, Ld. Sr. D.R. appearing for the Revenue supported the orders passed by the lower authorities and requested to uphold the same. 7. We have heard the rival submissions as well as paper books and case law compilation filed by the assessee. The assessee claims that the cash deposit is on account of demonetization and in fact cash sales was essentially generated on retail sales to various customers which is duly reflected in the cash book maintained by the assessee. A copy of the computerized cash book was submitted before the Assessing Officer, during the course of assessment proceedings, which are duly audited with Tax Audit Report. The Ld. A.O. has not found any defect or discrepancy in the audited books of accounts. The assessee has proved with reference to corroborative material evidence in the cash deposits with retail sales bill with name of the customers. Thus, the initial burden is fully discharged by the assessee. Whereas the Ld. A.O. without rejection of books of accounts and without enquiry with the purchaser of smaller denominations, made the additions which is not sustainable in law. 7.1. Further the sales are found recorded in the sales register, stock re....
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....uch as The Tribune, The Hindu etc. It is observed from the newspaper clippings that there was undue rush in various jewellery shops immediately after announcement of demonetization through the country." 7.3. Similarly, the Co-ordinate Bench of this Tribunal in the case of ACIT vs. Zinzuwadia & Sons IT(SS)A no. 50/Ahd/2021 dated 10- 05-2024 observed the sales made on the demonetization day as under : "20. Taking up first the anomaly noted by the AO that it was not possible to make sales to 223 customers in short span of 240 minutes on 08/11/16, the CIT(A) has dealt with the same at para 6.11 of his order as under: "6.11. On perusal of assessment order, it is observed that AO has proceeded to make addition of treating accounted sales in books of account as bogus sales through backdating on assumption that it was not possible to make such sale of huge jewellery post announcement of demonetization In the present case, sales on 08/11/2016 was claimed to have been made for Rs 3.58 crore out of aggregate addition of Rs 7.88 crore. The following is the few video and news items available in public domain justifying that post declaration of demonetization till the midnig....
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....t be accepted. 21. As is evident from a bare perusal of the above AO found the assessee's explanation plausible of having managed its affairs in such a manner so as to grab the opportunity of huge rush of public to jewellers on account of demonetization announced by the Government which was acknowledged by reports in the public domain. No infirmity in the explanation of the assessee has been pointed out to us during the course of hearing, neither do we find any in the same. Therefore we find no infirmity in the order of the Ld. CIT(A) accepting the assesses explanation with regard to allegedly unusually large number of customers catered to by the assessee on one single day." 7.4. In view of the above facts, in our considered view, when the sale proceeds had been supported with book results & primary evidences, which were not disproved by the AO, and that the same had already been assessed by the AO as revenue receipts from 'Business', then it was wholly improper for the AO to again tax these sale proceeds as unexplained cash u/s 69A of the Act, as it would amount double taxation of the same sum. This view is supported by the following decisions: a. CIT Vs V....