TaxTMI 
TaxTMI 
2025 (4) TMI 2161
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....essment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') dated 24.11.2020 by the Assessing Officer, ITO, Ward-7(4), Delhi (hereinafter referred to as 'ld. AO'). 2. The only effective issue to be decided in this appeal is as to whether the ld NFAC was justified in confirming the addition made on account of cash deposits made during the demonization period. 3. We have heard the rival submissions and perused the material available on record. The return of income for AY 2017-18 was electronically filed by the assessee company on 23.10.2017 declaring loss of Rs. 2,82,330/-. The assessee has four business locations/ verticals containing chemicals Unit at Delhi; manufacturing unit at Kundli, Haryana; Impor....
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....ng cash withdrawals in spite of sufficient cash balance in its kitty and there is no reason for holding huge cash. Further, the ld AO observed that the assessee has more secured loans and the liabilities to be discharged and accordingly, it should have prudently deposited the available cash balance with it in the bank account and settled the liabilities and secured loans. Since this has not been done by the assessee, the availability of huge cash balance of the assessee per se was doubted by the ld AO and accordingly, the addition was made u/s 68 of the Act in the sum of Rs. 2,58,99,000/- as unaccounted cash credit u/s 68 of the act in the hands of the assessee. The ld NFAC gave partial relief to the extent of Rs. 69,65,413/- as explained c....
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.... is very clear that the cash sales has been duly disclosed by the assessee in its return and P&L account. Accordingly, the observation made by the ld CIT(A) is factually incorrect and is hereby dismissed. 6. It is a fact that Kundli Unit engaged in the manufacturing of blankets had started commercial production during the year. Hence, logically there could not be any sales that could have been made on sales of blankets in the earlier year to make a comparison with the earlier year. The blankets are predominately sold in cash and huge cash sales were made by the assessee at Kundli Unit prior to date of announcement of demonetization as is evident from the cash sales made as under:- April 2016 Rs. 63,13,280/- May 2016 Rs. 61,74....