TaxTMI 
TaxTMI 
2026 (6) TMI 26
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....961 ["the Act"], the assessee has filed this appeal on the grounds as mentioned in Form No. 36 (Appeal Memo). 2. The background facts leading to present appeal are such that the assessee, an individual, is engaged in the business of stamp vending. The assessee filed return of income for AY 2017-18 declaring total income of Rs. 2,88,210/- (including business income of stamp vending activity). The case was selected for scrutiny under CASS to examine "large cash deposits compared to returned income" during previous year 2016-17 and the AO issued notices u/s 143(2)/142(1). In response to notices, the assessee made submissions to AO. On examination of statements of bank accounts of assessee, the AO extracted details of deposits made by assess....
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.... tender. The total income was accordingly assessed at Rs. 5,42,210/- against the returned income of Rs. 2,88,210/-. Aggrieved, the assessee preferred an appeal before Ld. CIT(A). The Ld. CIT(A), vide impugned order of first appeal, confirmed AO's action holding that no substantial evidence was furnished by assessee to establish that the SBNs deposits constituted business receipts and also that the transactions in SBNs during demonetization period were not valid for the business of stamp vending carried by assessee. Now, the assessee has filed present appeal. 4. Presently, the short issue for our consideration is whether the addition of Rs. 2,54,000/- made u/s 69A on account of deposits in SBNs during demonetization period is sustainable?....
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....t (this fact is demonstrated by Ld. AR by drawing our attention to the the Copy of assessee's A/c with Stamps Department filed in Paper-Book), there was no immediate necessity to deposit such collections in bank a/c. When the Bench raised a query seeking the names of the constituents from whom the impugned amounts were received, Ld. AR candidly submitted that the assessee serves multiple constituents and maintains a running account with the Stamps Department in which lump sum deposits are made routinely from time to time for the business of stamp vending, therefore it is not feasible to correlate each receipt with a specific constituent. He, however, submitted forcefully that the deposits in assessee's Bank a/cs as well as transfers from Ba....
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....e deposit of Rs. 46,000/- on 17.11.2016 in the MPGB Overdraft A/c. The Ld. AR has demonstrated, from bank statements of both SBI and MPGB placed in Paper-Book, that a cash withdrawal of Rs. 50,000/- was made by the assessee from his own SBI account on 16.11.2016 and Rs. 46,000/- was deposited in the MPGB account on the very next day of 17.11.2016. This establishes a direct and verifiable nexus between the withdrawal and deposit. The explanation that such re-deposit was made in Overdraft A/c with MGPB to reduce interest burden is commercially plausible and remains uncontroverted by Revenue. Accordingly, the addition to the extent of Rs. 46,000/- is not sustainable and is directed to be deleted. 9. We now turn to the remaining deposits agg....
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...., vide Para 6 of Annexure to the Instruction No. 3/2017 dated 21.02.2017 (SOP to be followed by Assessing Officers in verification of Cash Transactions relating to demonetization), instructed that cash deposits made during the demonetization window should be assessed in the context of the nature, volume and pattern of business activity of assessee. The guidance given by CBDT shows that the deposits of business are not to be treated as unexplained. The amount of Rs. 2,08,000/-, having regard to the nature and scale of business, adequately passes the tests laid down by CBDT. (iv) The Revenue has brought no positive material on record to demonstrate that the impugned deposits represent income from any source other than the business of....