TaxTMI 
TaxTMI 
2024 (10) TMI 1815
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....7-18 on 29.03.2018 admitting total income of Rs. 9,19,180/-; and the RoI was later selected for scrutiny under CASS mainly to verify the nature & source of cash deposits made during demonetization period. The AO noted that during the year assessee had deposited SBNs of Rs. 68,15,600/- after 08.11.2016 (demonetization period). So, the AO asked the assessee to explain the nature and source of the cash/SBN's deposited; and the assessee explained that out of the said amount Rs. 18,49,901/- was cash available as on 08.11.2016 and the balance of Rs. 50,76,593/- was received from the debtors who had purchased the fireworks on credit-basis during Diwali festival that was celebrated PanIndia on 30.10.2016 in the relevant year. The AO verified and found that Rs.18,49,901/- was closing balance as on 08.11.2016, which he accepted. But in respect of balance amount of Rs.50,76,593/-, even though the assessee filed the name/details of the customers/debtors from whom assessee retrieved the sale-receipts and also filed the financials (P & L A/c, audited books, balance sheet and other details); and despite the AO acknowledged that assessee had furnished the list of debtors from whom the collections ....
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....as on 31.10.2016 (Diwali day) for sale of firecrackers, whereas, we find that assessee had sufficient stock for making the sale in the last week of October, 2016; 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. Thus, it is noted that assessee's total sale of firecrackers during the year under consideration is to the tune of Rs. 3,06,69,628/- which included the cash deposited/sale of Rs. 49,65,799/-. In other words, the profit derived from the total sales of Rs.3,06,69,628/-includes cash sales of Rs. 49,65,799/-, which was shown as total income for the purpose of Income Tax and the assessee has paid taxes on the said income. And we note that assessee has been regularly filing GST/VAT returns and has filed the relevant details before the AO. [CST sales Rs. 2,76,06,461/-, as per CST order Rs. 2,76,06,456/-] [TNGST - TN Sales Rs. 30,63,167.27, as per VAT returns Rs. 30,63,167/-]. In the light of the discussion (supra), it can be safely inferred that the profits embedded in Rs. 3,06,69,628/- has been accepted by the AO. However, the AO has made separate addition of Rs. 49,65,799/- which has already b....
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....rader/distributors have been given, it takes only a click of the mouse to find out the address as well as the return details filed by that person. Therefore, it is presumed that once assessee filed all these details before the AO and the AO have not found any adverse material against them, the action of the AO to have rejected the same/relevant evidences can't be countenanced. Thus, it is noted that assessee has placed before the AO the primary facts to prove the nature and source of SBNs, which has not been found by him to be incorrect or false. Therefore, the action of the AO to make addition u/s.69A of the Act, is not acceptable for the aforesaid reasons and stated (infra). 7. And as noted, the AO has not found any infirmity in the details filed by assessee to prove the nature & source of SBN's (supra) rather it is noted that the AO had acknowledged that assessee had filed the names of 207 customers, but didn't enquire the veracity of the assessee's assertion that money/SBNs have been deposited by them in his bank account, instead he has only stated that "assessee has not properly explained with supporting evidences without giving any confirmation from them". However, we don'....
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....e practice, there is no doubt whatsoever with regard to the explanation offered by the assessee that it has collected cash from debtors towards sales made in cash before demonetization period. Further, it is noted that the assessee has also regularly filing GST/VAT returns and there is also being no change or deviation in the VAT returns filed for the period i.e. before the announcement of demonetization. And note that the assessee also declared sales made in cash in their books of accounts and filed necessary return of income and paid tax of the said income. Moreover, we note that the assessee has also made cash deposits regularly before and during demonetization period and therefore, it is not a case of amount deposited in SBNs as come out of undisclosed source or under any circumstances only to change colour of the money. From the details filed by the assessee, it is evident that during the month of Diwali festival, assessee used to have the maximum sale made (on credit). From the analysis of earlier or subsequent years reveal that there is no significant change in the pattern of cash sales/cash collection and cash deposit during demonetization period. The AO is not disputing th....