TaxTMI 
TaxTMI 
2026 (5) TMI 317
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....st the action of the Ld.CIT(A) confirming the addition of Rs. 2,51,97,500/- u/s. 68 r.w.s. 115BBE of the Income Tax Act, 1961 (hereinafter in short 'the Act') regarding the Specified Bank Notes (hereinafter in short 'SBN') deposited during demonetization period. 3. The brief facts of the case are that the assessee is a partnership Firm engaged in the business of manufacture and wholesale of fireworks. The assessee-Firm filed its return of income (RoI) for AY 2017-18 on 31.10.2017 admitting total income of Rs. 21,92,460/- which was selected for complete scrutiny. The AO noted that during the year assessee had deposited Specified Bank Notes (SBNs) of Rs. 2,51,97,500/- after 08.11.2016 (during demonetization period), so, he directed the ass....
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....business of manufacture and wholesale business of fireworks, and had filed its return of income offering Rs. 21,92,460/-. The AO noted that assessee had deposited SBNs to the tune of Rs. 2,51,97,500/- during the demonetization period and asked the assessee to prove the nature and source of the same. The assessee submitted before the assessing officer that the cash/SBNs were sale proceeds i.e. trade receipts, which were mainly deposited by the purchasers directly into the bank account of the assessee. The assessee in order to prove the same, is noted to have filed the details/list of the customers who deposited the cash, along with details of the bank, bills raised, amounts deposited; and also filed copies of the party's relevant ledger acco....
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....AO is noted to have not rejected the purchases, sales or audited books of accounts of the assessee; and it is not the allegation of the AO that assessee didn't have sufficient stock for sale of firecrackers as on 31.10.2016 (Diwali day) or during demonetization period. The AO has not disputed the return of income of Rs. 21,92,460/- and it is not the case of the AO that assessee had any other source of income other than the business income from sale of firecrackers. It is a fact that assessee has been regularly filing VAT returns and has filed the relevant details before the AO. In the light of the discussion (supra), it can be safely inferred that the profits embedded in the total sales has been accepted by the AO. However, the AO has made ....
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....supra) rather it is noted that the AO had acknowledged that assessee had filed the names of customers, but didn't enquire the veracity of the assessee's assertion that money/SBNs have been deposited by them in his bank account. The AO didn't conduct any enquiry to ascertain the veracity of the nature and source of cash deposit furnished by the assessee i.e. names & amount deposited by the customers/dealers, which included relevant details of customers. 9. It is evident from the financial statements that the Assessee had reported sales turnover of around Rs. 10,66,32,907/- including the disputed component of Rs. 2,51,97,500/- while filing the return of income filed for the assessment year 2017-18. The Assessee had also reported the said t....
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....e since it would tantamount to double taxation of the same income as held by the Hon'ble Gujarat High Court in the case of CIT v. Vishal Exports Overseas Ltd., (Tax Appeal No.2471 of 2009)[Gujarat High Court] and also the decision of the Hon'ble Delhi High Court in the case of CIT v. Kailash Jewellery House [Appeal No.613/2010] (Delhi High Court) (refer to the decision of the ITAT Indore Bench in the case of Dewas Soya Ltd, Ujjain in ITA No.336/Jnd/2012). 11. The other reason given by the AO to make addition u/s. 68 of the Act was that assessee could not have transacted/received SBNs during demonetization period and relies on the notification issued by the Government of India (supra). No doubt Specified Bank Notes of Rs. 500/- & Rs. 1,00....