TaxTMI 
TaxTMI 
2026 (9) TMI 1695
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....ment order dated 17.12.2019 passed u/s 143(3) of the Act pertaining to Assessment Year 2017-18. 2. Brief facts of the case are that the assessee is a company, engaged in the business of wholesale trading and filed its return of income on 31.03.2018, declaring loss of INR 11,264/-. The case was selected for scrutiny and notice u/s 143(2) followed by notice u/s 142(1) were issued from time to time. In response, the had filed submissions stating that the allegation of the cash deposit of INR 2,00,10,000/- in the show cause notice as cash deposited in bank is incorrect and the correct figure was of INR 1,00,05,000/- which was deposited in SBN during the period of demonetization in Three bank accounts maintained with Punjab National Bank. In ....
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.... (C), therefore, they are dismissed. 6. In the remaining Grounds of appeal Nos. (D) to (F), the assessee has challenged the action of ld. CIT(A) confirming the additions of INR 1,00,05,000/- made u/s 68 of the Act. 7. Before us, ld.AR for the assessee submits that immediate source of cash deposit was out of the funds accumulated as a result of cash sales made during the year under appeal which was duly recorded in the regular books of accounts maintained. The AO has not doubted the sales made nor the trading results declared were doubted and the books of accounts have been accepted. Once the sales have been accepted, the cash deposited into bank out of the accumulation of cash from such sales could not be held as unexplained credit mo....
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....tion of the orders of the lower authorities. 9. Heard the contentions of both parties at length and perused the material available on record. It is observed that the AO has treated the cash deposited in SBN during the demonetization period in the bank as unexplained credits u/s 68 of the Act solely for the reason that there were no cash sales declared by the assessee in the immediately preceding year and during the year under appeal, the assessee has not provided the names of the parties, PAN etc. to whom cash sales were made. Thus the AO was of the opinion that the assessee has failed to prove the identity, creditworthiness and the genuineness of the transactions. At this juncture, we refer the provision of section 68 of the Act which r....
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....uch explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory: Provided also that nothing contained in the first proviso or second proviso shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10." 10. From the perusal of the provision of section 68 of the Act, it is observed that the provisions of section 68 are applicable wherein some deposits were credited in the books of accounts and the assessee has failed to establish the identity, creditworthiness of the persons from whom such funds are received and genuineness of the transactions is not established. In the ins....