AI Drafter 
TaxTMI 
TaxTMI 
2026 (5) TMI 1474
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....ct. The said return was revised on 06.06.2018 at the same income. Case of the assessee was selected for complete scrutiny wherein one of the reason was large value of cash deposited during demonetization period. The AO observed that assessee has deposited a sum of Rs. 2,22,35,734 /- during the demonetization period as per the form submitted, however later stage it was found that total cash deposited during demonetization period was of Rs. 2,24,01,455/-. It was explained by the assessee that there was cash in hand of Rs. 85,76,000/- in SBN as on the opening hours of 09.11.2016 that is the next day when the demonetization was announced by the Hon'ble Prime Minister and the balance amount was claimed as deposited by the portal agents and cash sales in new notes also. However, the AO had not accepted the contention of the assessee and made the addition for the differential amount of Rs. 1,38,25,455/- (2,24,01,455-85,76,000) u/s. 68 of the Act as an explained cash credit. 3. In first appeal, vide order dated 01.07.2025, ld. CIT(A) has deleted the addition, therefore, the Revenue is in appeal before the Tribunal. Solitary ground of the appeal of the Revenue is with respect to the dele....
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....arned Assessing Officer were as under: Financial Year Total Cash Deposit in Banks - Whole Year Cash Deposited from 01.04.2016 till 08.11.2016 Cash Deposited during 08.11.2016 to 30.12.2016 2015 -16 50. 61 Cr. 27. 45 Cr. 8. 57 Cr 2016 -17 50. 52 Cr. 40. 08 Cr. 2. 24 Cr.* * Includes opening balance lying at the closing hours on 08.11.2016 at about Rs. 86 Lakhs. Based on the aforesaid figures extracted, it would be noted that the primary factual findings of the learned Assessing Officer as noted in Para-6 based on which the whole issue seems to have arisen are factually incorrect because the learned Assessing Officer observed that cash deposited by the assessee during the demonetization period as compared to the corresponding similar period in the preceding year are much higher. Whereas from the chart given above it would be noted that the cash deposited during the demonetization period at Rs. 2.24 Crores is just about 26 % of the cash which was deposited during the similar period in the immediate preceding year. Moreover, it would be noted that out of the cash deposited at Rs. 2.24 Crores, about 86 lakhs was the cash in hand with ....
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....atement of profit and loss ' and the resultant profits have been admittedly declared in the return of income. The income thus arising from cash sales has been duly subjected to taxation..... 10.3 Having assessed a credit of revenue character as income, it is outside the ambit of the AO to subject the same credit under different provision i. e. section 68 yet again, inflicting double whammy on the assessee. Besides, the books of accounts and book results have been not rejected per se. No defect has been pointed out on the declarations made towards purchases, the closing stock and the profits either. The additions made have resulted assessment of cash sales twice which is not permissible in law." Similarly, in the present case, the Assessee' s cash sales were duly recorded in the audited books and offered to tax as part of the total income. Therefore, treating these receipts as unexplained under Section 68 constitutes an impermissible "double taxation" of revenue that has already been assessed. • Merchants Credit Co- operative Society Ltd., vs ITO (ITA No. 329 /Bang/ 2023 ) "There is no doubt that the assessee has satisfied the identity of ....
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....ined merely due to their timing during the demonetization period. • [2024] 169 taxmann. com 220 (Chandigarh - Trib.) IN THE ITATCHANDIGARH BENCH 'B' Income-tax Officer v. Shree Balaji Processors* "It is a matter on record that regarding allegation of bogus sales, nothing has been brought on record by the Assessing Officer. The Assessing Officer has accepted all the purchases along with opening and closing stock of the assessee. Then on what basis sales out of such stock/ purchases may be rejected without any proof brought on record. Thus, the above findings given by the Commissioner (Appeals) on this issue in his order is very much justified and needs no interference. Accordingly, revenue's appeal on this ground is hereby dismissed. [Para 14]" Similarly, in the present case, the Ld. AO accepted the Assessee's opening cash balance and audited books. Therefore, the sales generated through these accepted business records cannot be rejected or treated as unexplained credits without concrete evidence to disprove the Assessee's explanation it is respectfully submitted. Further reliance is placed in the following cases: • Agsons....