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2024 (2) TMI 1231 - ITAT DELHIUnexplained cash credit u/s 68 r.w.s 115BBE - inflated sales pursuant to demonetization - HELD THAT:- Merely because there was a minor variation in the cash sales during the alleged period compared to previous year would not mean that the assessee has inflated its sales to cover up demonetized currency. During the year under consideration, diwali was on 31.10.2016 and it is common knowledge that in our society, festival runs 15 days after diwali and it is also a common fact that once the demonization was declared by the Hon'ble Prime Minister, there was frenzy in the market and people were purchasing goods they never intended to purchase just to get rid of demonetized currency. For the sake of repetition, the assessee had furnished month-wise purchases, month-wise details, stock register, valuation of closing stock, month wise details of cash sales, copies of VAT returns and not a single defect has been pointed out by the Assessing Officer in these clinching evidences. Since the cash sales have already been offered as income, the same cannot be taxed in the garb of inflation sales to cover up demonetization currency. Allegation of non-mentioning of names of the purchasers - It is not only baseless but without any backing of law as the assessee is not required to keep the names of purchasers for cash sales less than Rs. 2 lakhs and not even one instance has been pointed out by the Assessing Officer where cash sales were more than Rs. 2 lakhs. No merit in the impugned addition made by the AO and also we do not find any merit in the part relief given by the ld. CIT(A). Therefore, we direct the AO to delete the addition - Accordingly, Ground No. 2 with all its sub-grounds is allowed. Disallowance on account of business promotion - HELD THAT:- On perusal of record, we find that business promotion expenses include amount incurred on providing free gifts to customers on purchase of large amount of jewellery items as it is general practice in this line of trade. It is a settled proposition of law that the Assessing Officer should not decide how a business man should do his business. Moreover, all the expenses are supported by bills and vouchers, duly recorded in the books of account. We, therefore, do not find any reason to interfere with the findings of the ld. CIT(A). Ground No. 3 is dismissed. Addition on account of depreciation and car running expenses - HELD THAT:- After considering the facts, we are of the considered opinion that depreciation is a statutory allowance available to the assessee and this is not the first year of claim. Therefore, we do not find any merit in the disallowance of depreciation. Car running expenses are fully supported by bills and vouchers and are incurred towards petrol and regular repair and maintenance of the cars used including insurance premium. We do not find any merit in the disallowance and the ld. CIT(A) has rightly deleted the same, which calls for no interference. Unaccounted stock due to difference in valuation of closing stock - typographical error occurred in the figure of stock details of gold bar as mentioned in the tax audit report which was without decimal point - HELD THAT:- The quantitative figures of purchases, consumption and sales of gold bars were mentioned without the decimal point in the tax audit report, due to which the quantity of closing stock of gold bars differed from the actual quantity of closing stock of gold bars appearing in the books of account. Non-mentioning of decimal value of gold was determined at Rs. 2813.95 crores, which has resulted into an absurd figure. The ld. CIT(A), after appreciating typographical error and after considering reconciliation, deleted the impugned addition. We do not find any error or infirmity in the factual findings of the ld. CIT(A). Accordingly, Ground No. 5 raised by the Revenue stands dismissed.
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