TaxTMI 
TaxTMI 
2025 (4) TMI 2197
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....collections made from these customers, with detailed records substantiating the transactions. The appellant has filed month-wise sales abstracts, Sales Tax Returns, VAT Returns, and bank statements along with this Appeal as evidence. These documents align with the cash deposits, showing no discrepancies or suppression of sales. The appellant maintains that the demonetized Currency deposited was received from customers against their outstanding dues for prior supplies. The Assessing Officer (AO) failed to identify any irregularities in the appellant's records and has not disputed the sales proceeds reflected in the accounts. The absence of specific findings against the appellant's explanation confirms that the deposits were genuine and part of routine business transactions. The AO's decision to treat the deposits as unexplained income ignores the realities of the appellant's business environment and the evidence provided. The deposits were consistent with the appellant's operational practices, and no unusual activity was detected. III. The appellant contends that the AO failed to adhere to procedural requirements during the assessment. Despite the appell....
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....e AO has not identified any suppression of sales or discrepancies in the records. The appellant's detailed submissions demonstrate that the deposits were consistent with the declared income. The AO's failure to dispute the records or provide evidence of suppressed income indicates that the assessment lacks merit. The appellant asserts that the absence of contrary evidence confirms the validity of the explanation provided for the cash deposits. Tax assessments must be based on substantive evidence, not assumptions. VI. The appellant maintains that the addition of Rs. 6,79,000/- as unexplained income is unjustified and contrary to the principles of fairness in taxation. The deposits have already been reflected as sales proceeds in the business accounts and subjected to tax. Treating these deposits as unexplained income results in double taxation. The appellant's records clearly demonstrate that the deposits Were part of routine business operations and not unexplained credits. Taxation of the same amount twice undermines the integrity of the assessment process. The appellant requests the tribunal to ensure fair taxation by deleting the addition, which is inconsist....
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....ing an order u/s.143(3) of the Act dated 26.12.2019. Aggrieved by the order of the AO the assessee preferred an appeal before the ld.CIT(A), NFAC. 3.1 On perusal of the submissions of the assessee, the ld.CIT(A) was not convinced and hence confirmed the addition made by the AO by passing an order dated 19.11.2024 by holding as under : "The appellant superficial statements and documentation cannot be accepted. The Sales resulting in demonetized notes post demonetisation is not explained. The appellant has failed to explain the source of the SBNs deposited. Therefore, the addition made by the AO is confirmed. All other related grounds are dismissed" Aggrieved, the assessee is in appeal before us. 4. The ld.AR for the assessee submitted that the ld.CIT(A) has erred in confirming the addition made by the AO without considering the submission made by the assessee. The ld.AR stated that the assessee had furnished the entire books of accounts before the AO along with the cash book showing the cash balance as on 08.11.2016 in support of explaining the source of cash. During the course of assessment, the assessee had submitted the month wise sales tax return, TDCC bank ....
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....tisation period is not sustainable in law. Therefore, we do not countenance the action of the ld.CIT(A) in confirming the addition made by the AO for the reason that the assessee was not authorised to accept the SBN during the demonetisation period. Our view is also supported by the decision of this Tribunal in the case of Raju Dinesh Kumar Vs. DCIT (Supra) and the relevant portion is extracted below: 9. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. The facts borne out from the record clearly indicate that the assessee is running a dhall mill and manufacturing various kinds of dhalls. The facts brought on record by the AO further indicated that the assessee procures various kinds of pulses from local market and manufacturing into various kinds of dhalls and sells to unregistered dealers in cash. The assessee has filed comparative cash sales and cash deposits into bank account for FY 2015-16 & FY 2016-17 and also cash sales and cash deposits for the month of October & November, 2015 and October & November, 2016. On perusal of details filed by the assessee, which has been reproduced by the AO in th....
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....the parties, perused materials available on record and gone through orders of the authorities below. In so far as addition of Rs. 6,62,783/-, we find that the assessee itself has admitted shortage of source in their cash flow statement filed before the AO. Therefore, from the above, it is undoubtedly clear that the assessee could not explain source for cash deposits to the extent of Rs. 6,62,783/- and thus, we are of the considered view that, there is no error in the reasons given by the CIT(A) to sustain additions made towards cash deposits to the tune of Rs. 6,62,783/-. In so far as addition of Rs. 20,40,000/- towards advance received from group concerns, it was an argument of the appellant that group concerns have paid advance in cash during demonetization period and deposited into IDBI bank account. In this regard, the appellant has filed necessary details including PAN nos. and confirmation letters from the group concerns to prove receipt of trade advance. The Assessing Officer has not disputed these facts, however made additions only on the ground that the assessee should not have accepted cash in specified bank notes after 08.11.2016. We find that this issue is covered in fa....
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....see is backed by sales carried out by the assessee as recorded in the books of accounts. Therefore, the source of cash is duly explained. The provisions of Sec.68 could be invoked only in cases when there was unexplained cash credit in the books of accounts maintained by the assessee. However, the assessee has duly identified the debtors from whom the cash was received and the same could not be disputed by lower authorities. The PAN of respective debtors as well as quantum of cash realized from each of them has duly been detailed by the assessee before Ld. AO during assessment proceedings. No defect has been pointed out in the books of accounts. In such a case, the credit could not be held to be unexplained cash credit and the impugned additions are not sustainable in law. 7. The SMC bench of this Tribunal in Mrs. Umamaheswari Vs. ITO (supra), on identical facts, deleted similar additions on the ground that the assessee had duly evidenced the source of cash deposit and therefore, addition could not be made u/s 68. Similar is another decision of SMC Raipur Bench in Rahul Cold Storage Vs. ITO (supra) wherein it has similarly been held that when the deposits were sourced out ....