2023 (9) TMI 433 - ITAT AHMEDABAD

Cash deposited as unexplained cash - DR submitted that the cash received was not mentioned in the books - HELD THAT:- It is pertinent to note that no books were rejected in assessee’s case and in fact the cash books as well as cash deposited during the demonetisation period was on the basis of heavy cash sales during those days.

The contention of the Ld. AR that due to heavy cash sales on those days, it was not practicable for the Accountant to enter the cash entries immediately in the books of accounts. The cash received from the debtors were deposited in the bank account on the same date, but the entries for the same were made on combined basis.

This has led to negative cash balance in the books of accounts for 2-3 days but the assessee had sufficient cash balance to deposit cash of Rs. 6,56,000/- on 16.11.2019 as cash sales on that day itself was of Rs. 7,16,325/- and, therefore, the difference was explained to the AO as well as the CIT(A) which was totally ignored by both the Authorities. Thus, the addition made by the AO u/s 69A of the Act does not survive. Hence, appeal of the assessee is allowed.