TMI Blog2024 (4) TMI 496X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. In our considered opinion, given the business model of the assessee, the nature and source of credit within the meaning of section 68 of the Act stood properly explained in the instant case and accordingly no addition could be made as unexplained cash credit u/s 68 of the Act. Accordingly, the grounds raised by the revenue are dismissed. Addition u/s 69C - Unexplained business Expenditure - HELD THAT:- We find that the entire business expenses had already been accounted in the regular books of accounts of the assessee and hence the sources for incurrence of the same are drawn from the books of accounts regularly maintained by the assessee. It is not the case of the ld. AO that the said expenditure had been met by the assessee out of its books. Hence in our considered opinion, the provisions of section 69C of the Act per se cannot be made applicable in the instant case and hence the addition made by the ld. AO in this regard had been rightly deleted by the ld. CIT(A). Assessee appeal allowed. - Shri C. N. Prasad, Judicial Member And Shri M. Balaganesh, Accountant Member For the Assessee : Shri C. S. Anand, Adv For the Revenue : Shri Kanv Bali, Sr. DR ORDER PER M. BAL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was framed u/s 143(3) of the Act on 27.10.2009 wherein the business model of the assessee was accepted by the revenue. For the Asst Year 2011-12, the ld. AO reopened the assessment of the assessee on the ground that no return of income was filed by the assessee for the relevant assessment year. In the said reassessment for the Asst Year 2011-12, the very basis of existence of assessee s aforesaid business was disputed by the revenue and addition was made on account of cash deposits in the sum of Rs 1,09,49,000/- as unexplained cash credit u/s 68 of the Act. The ld. AO based on the decision taken by him in Asst Year 2011-12, reopened the proceedings for the Asst Year 2012-13 also and made similar addition towards cash deposits in the sum of Rs 2,69,97,300/- by verbatim copying the findings and observations made by him in Asst Year 2011-12. 7. We find that the return of income for the Asst Year 2012-13 was filed by the assessee on 18.1.2013 declaring total income of Rs 11,95,150/- . The ld. AO had primafacie observed that assessee was not doing the business of change of currency. The ld. DR before us also placed a factual report from the ld. AO wherein it was categorically mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances of Rs 84 lakhs which was not found to match with the line of business of the assessee i.e. business of change of torn notes. The cash book submitted by the assessee did not show even a single entry of commission received against the change of old notes with new one and small denomination with bigger denomination. The assessee failed to provide all names and addresses of the persons to whom he had provided the services of change of currency from old note with new one and also of those from whom he had received torn notes and provided from new notes. The ld. AO further observed that from the cash book submitted it revealed that amount withdrawn from the bank was put into cash book and from cash book after some time it was put into bank again and sent to other parties. Cash was not used for the business activity admitted by the assessee in it sreply so submitted during the course of assessment proceedings. Summons u/s 131 of the Act issued to the assessee remained uncomplied by the assessee. With these observations, the ld. AO proceeded to treat the cash deposits made in the bank account in the sum of Rs 2,69,97,300/- as unexplained cash credit u/s 68 of the Act in the reassessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k and Standard Chartered Bank. The learned counsel further submitted that the Assessing Officer has deliberately ignored a very relevant fact that the assessee withdrawn the assessee has withdrawn of Rs. 1,99,30,000/- from said two bank accounts which is very higher than the total amount deposited by the assessee to the said bank accounts. The learned counsel submitted that when the assessee is in the business of Exchange of Torn/Soiled/Mutilated Indian Currency Notes into New/Fresh and vice-versa on discount/commission basis then it is obvious that the assessee would deposit cash/notes received from clients and would also simultaneously withdraw cash/notes from the bank accounts for the purpose of returning the same to the customer. Therefore there was no valid reason for the AO to make addition u/s. 68 of the Act of entire amount of cash deposited to the bank accounts of the assessee. The learned counsel also place reliance on the judgment Hon'ble jurisdictional High Court of Delhi in the case of Sona Electric Co. vs. Commissioner of Income Tax (152 ITR 507) and order of ITAT Delhi in the case of ITO Mrs. Deepali Sehgal (ITA No. 5660/Del/2012 order dated 05.09.2014 and Smt. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no. 7 to 11 of assessee on merits are also allowed. 11. Hence from the aforesaid findings of this Tribunal in Asst Year 2011-12 in assessee s own case and given the fact that the ld. AO himself had admitted that the facts of Asst Year 2012-13 are exactly identical with Asst Year 2011-12 , we hold that the business model of the assessee as detailed in the beginning part of this order needs to be accepted as genuine. 12. However, it is a fact that there were cash deposits made by the assessee in his bank accounts, for which the assessee is duty bound to explain the sources for the same. It is not in dispute that the assessee had duly furnished the cash book for the entire year before the ld. AO. The commission income would certainly not get reflected in explicit terms as it would always need to be inferred from the figures reflected in the cash book. It is not in dispute that the assessee always had stock in hand in the form of currency notes and also has closing stock of currency in hand as on 31.3.2012 at Rs 1,75,45,287/- which is duly reflected in the Balance Sheet of the assessee as on 31.3.2012. In the said Balance Sheet, the unsecured loans received by the assessee and loans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s cash deposits, shall apply mutatis mutandis for Asst Year 2017-18 also , except with variance in figures. Further, we find that the assessee is only exchanging old notes with new notes in lower denomination of Indian currency, it would obviously not be holding higher denomination currency. Accordingly, the assessee had not deposited any currency in Specified Bank Notes during the demonetization period. Hence the observation made by the ld. AO in this regard is totally baseless and devoid of merits. The ld. AR before us placed on record the extract of the cash book already forming part of the records and submitted the availability of cash balance in tabular form as under:- Chart containing summary of Cash Transactions/Extracts of Cash Book for FY 2016-17 Particulars Cash Outflow Cash Inflow Opening Cash as on 01.04.2016 53026347 Cash withdrawals 18525000 Cash Deposited 16982000 Cash Commission (Rs. 3073751/- being the amount of commission plus Rs. 458310/- being the amount of service tax) 3532061 Cash Utilization (Expenses etc.) 1118217 Closing Cash in hand as on 31.03.2017 56983191 Total 75083408 75083408 16. From the above table, it is evident that the entire cash deposits made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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