TaxTMI 
TaxTMI 
2026 (7) TMI 886
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....he assessment order dated 30.12.2019 u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') passed by ITO, Ward-26(4) New Delhi, for AY: 2017-18. 2. Heard and perused the records. The assessee's return of income was picked up for scrutiny under CASS and during scrutiny proceedings assuming abnormal increase in cash deposit during demonetization was examined and Assessing Officer examined the issue of deposit of Rs. 54,03,000/- in cash in in two Bank of Baroda account of the assessee during demonetization period on 09.11.2016 to 30.12.2016 and assessee's claim that the same is out of cash sales was not found sustainable by the ld. Assessing Officer and the addition of Rs. 54,03,000/- was made which have been sustain....
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....t mismatches explained as inadvertent rather than justified with supporting evidence, leading AO to conclude that the books of account were unreliable. 6.2 The appellant has filed written submissions and has argued that all cash deposits were fully explained through regular business cash sales and legitimate withdrawals from the bank, as reflected in the VAT returns and sales invoices. It was contended that all purchases and sales were genuine, inventory tallies matched (with tax audit reports), and there was no adverse material found in books. 6.3 The appellant has explained that the spike in cash sales was due to increased sales of fabrics through counter transactions in an industrial area, alongside continued business i....
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....per reconcillation of VAT returns with books of accounts for the relevant period despite explicit AO requests. Significantly, the revision of third-quarter VAT returns after the assessment period was explained as a reporting oversight, but was unsupported by credible evidence, raising a presumption of account manipulation for the period under scrutiny. 6.5 Additionally, the explanation of appellant regarding the retention of substantial cash-in-hand before demonetization were found untenable under judicially endorsed human probability principles. The business had not previously recorded such high volumes of cash sales or closing cash, and the sudden spike was not corroborated with matching trends or supporting documentation from pr....
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....Ld. DR has countered the same by relying relevant findings of ld. AO as sustained by the ld. CIT(A). 5. We have considered the rival contentions and what is material in the fact before us is that there is no dispute with regard to assessee's nature of business and that the same certainly involves cash component sales. Admittedly, assessee maintained proper books of account which have not been rejected and at the same time admittedly assessee's books of account were subject to tax audit which was there before the ld. Tax authorities. Assessee establishes a cash in hand of Rs. 55,75,247/- as on 08.11.2016 this is certainly higher than the impugned deposits. Assessee's cash fabrics sales of Rs. 47,87,915/- has not been doubted on the basis ....
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....see in providing certain details which were not actually called by any specific notice and further unless the details already filed are found to be in any way not worth acceptance. The assessing officer has drawn of the suspicion from allegation that there was sudden rise at the end of October in cash sales and the cash balance as increase from Rs. 2,96,096/- to Rs. 42,87,119/-. When assessee claims that assessee had stock to goods like fabrics where any household need products then sales during period of demonetization cannot be held to be not genuine. Suspicion raised by assessing officer has been sustained by ld. CIT(A) but such suspicion howsoever strong on the basis of the alleged facts arising out of change in ratio of cash to total s....