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2024 (2) TMI 834 - ITAT DELHIAddition u/s 68 r.w.s.115BBE - cash deposit made during the demonetization period - HELD THAT:- It is fact on record that assessee had indeed made cash withdrawals in the month of October 2016 itself which is just a month prior to the announcement of demonization by the Govt. of India. Assessee also explained that the purpose of withdrawals cash was for the purpose of payment to his factory workers as there was labour unrest in his factory at the end of September 2016. The assessee had furnished week-wise cash sales of cash deposit made during the period 08.11.2016 to 31.12.2016 providing the details of opening cash in hand, cash withdrawals made from the bank, cash deposits made in the bank, cash sales made during the period and closing cash balance. In the instant case, the assessee had given proper explanation for withdrawal of cash in whole sums in the month of October, 2016 which evidently enabled him to hold huge cash balance to make cash deposit (i.e. during demonetization period). As stated earlier, similar cash deposit made by the assessee in the sum of Rs. 12 lakhs in July 2016 was also sourced out of cash balance available with the assessee in its books, which has been accepted by the revenue. From the perusal of the cash book, we find that there was absolutely no negative cash balance with the assessee on any single day. Once the cash book together with audited books of account and tax audit report filed by the assessee before the AO had not been rejected and once, there is sufficient cash balance available with the assessee to make cash deposit and the same are duly reflected in the books of account, there is no case for the revenue to hold that cash deposit were made out of undisclosed source of income of the assessee warranting any addition u/s 68. In any case, it is for the revenue to prove that the cash withdrawals made earlier had been utilized by the assessee for some other purposes and the same was not available with the assessee as a cash source to explain the cash deposits. Hence, we have no hesitation to delete the addition made towards unexplained cash deposits during demonetization period in the instant case - Assessee appeal allowed.
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