2025 (4) TMI 1965

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.... that the main grievance of the assessee is against the action of the Ld.CIT(A) confirming the addition of Rs. 8,61,000/- u/s.69A of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). 3. The brief facts are that the assessee derives income from business in the name and style of M/s.Thirumurugan Modern Rice Mill and filed its return of income (RoI) on 01.10.2017 for AY 2017-18 declaring total income at Rs. 10,06,500/-. The RoI was selected for complete scrutiny through CASS; and the AO acknowledges that pursuant to statutory notices issued by him, the assessee duly filed P&L A/c, balance-sheet, income computation statement, copy of bank account statements & details of cash deposits made in the account, etc. The AO is noted t....

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....the records. We note that the assessee runs a Modern Rice Mill and filed its RoI for AY 2017-18 on 01.10.2017 declaring total income at Rs. 10,06,500/-. The RoI was selected for complete scrutiny and the AO noted that the assessee had two bank accounts maintained with SBI and also noted that during the demonetization period, the assessee had deposited total cash of Rs. 39,81,500/- [including SBNs as well as non-SBNs], and out of this amount, the AO noted that the SBNs were to the tune of Rs. 25,61,000/-. The AO noted that the assessee had deposited Rs. 17 lakhs on 10.11.2016 and deposited the balance of Rs. 8,61,000/- on different dates between 11.11.2016 to 20.12.2016; and asked the assessee to prove the nature and source of cash deposits ....

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....drawing adverse inference against assessee cannot be accepted. According to us, merely because the assessee deposited cash later in its bank account, can't be the sole reason to doubt the genuineness of the claim made by the assessee that it had cash on hand as on 08.11.2016 to the tune of Rs. 25,02,586/- [out of it, the AO has accepted Rs. 17 lakhs and the balance amount of Rs. 8,61,000/- has been only brought to tax u/s.69A of the Act]. The assessee in support of its claim that it had sufficient cash balance to cover up the SBNs deposited to the tune of Rs. 25,61,000/- during demonetization period had produced the cash book for the year and the AO has not disputed the availability of sufficient cash on-hand in the cash book to cover up Rs....