TaxTMI 
TaxTMI 
2026 (3) TMI 786
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 250 of the Income Tax Act, 1961 (hereinafter referred to as the "Act") and relates to Assessment Year (A.Y.) 2017-18. 2. The ground of appeal raised by the assessee reads as under: "1. The Ld. CIT(A) has erred in law as well as in fact in upholding addition of Rs. 32,90,000/- made by Ld. AO u/s 69A of the act being cash deposited in demonetization period. " 3. The solitary issue in the present appeal relates to addition made to the income of the assessee on account of cash found deposited in his bank account remaining unexplained to the tune of Rs. 32,90,000/-. 4. The facts of the case are that the assessee engaged in advertising business, had filed return of income declaring total income of Rs. 48,33,320/-. The case was ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e in cash, and submitting its audited financial statements. His contention was that no infirmity was found in any of the documents submitted by the assessee nor were the books of accounts rejected. His case was that the authorities below had rejected assessee's explanation for baseless and irrelevant reasons. The Revenue, on the other hand, has relied on the findings of the Ld. CIT(A)/AO. 7. On considering the arguments of both the sides and ongoing through the orders of the authorities below, we find merit in the contention of the Ld. Counsel for the assessee. 8. The cash deposited in the bank of the assessee amounting to Rs. 32,90,000/- during demonetization period pertained to cash deposit in three bank accounts of the assessee....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e of Rs. 5,51,593/- and, therefore, it was found strange that the assessee had made periodic withdrawals from the bank account amounting to Rs. 28,20,000/- during the period from 01.04.2016 to 31.10.2016 maintaining it as cash in hand without spending it for business purposes. 12. We do not find any substance in this reasoning of the Ld. CIT(A) for rejecting assessee's explanation of cash deposited in the bank account during demonetization being sourced from cash withdrawals made from bank. Firstly, not a single entry in the cash book has been found to be false or incorrect and the Books of accounts have not been rejected. The AO is only questioning the business wisdom of the assessee for withdrawing allegedly huge cash. The AO canno....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as rejected the assessee's explanation attributing the cash deposit in the bank to cash sales made, finding that the assessee had not established the genuineness of the cash sales by furnishing any details of the customers to whom the sales were made and further, noting that no TDS was deducted on the bills raised to these parties. 14. The assessee before us has submitted the ledger account of all such parties to whom cash sales were made, which was submitted during the assessment proceedings and he has pointed out that they contain the complete address of the parties also. Therefore, the finding of the Ld. CIT(A) that the assessee did not furnish details of parties to whom cash sales were made, we hold, is incorrect. 15. Even oth....
X X X X Extracts X X X X
X X X X Extracts X X X X
....en a plausible explanation of the same before us, we reject this basis of the Ld. CIT(A) also for rejecting the assessee's explanation of source of cash deposited in his bank account. 19. As for the basis with the AO for rejecting assessee's explanation, we find that the Ld. CIT(A) found no merit in the same having found his own basis for rejecting assesses explanation, which have all been delat with by us above. 20. The AO, we find, had noted the assessee's explanation to be not tenable finding that the assessee had made cash sales to a party i.e. Goodluck Hotels Pvt. Ltd. even prior to its incorporation. To this, the assessee had pointed out to the Ld. CIT(A) that this information was used by the AO without confronting i....