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TMI Blog2024 (5) TMI 1073X X X X Extracts X X X X X X X X Extracts X X X X ..... 19 as called for by the Assessing Officer. The Assessing Officer on analyzing the cash sales during the assessment year 2016-17 and during the current assessment year i.e. 2017-18 was of the view that the cash sales made during the current assessment year were abnormally high while compared to the cash sales made during the assessment year 2016-17 for the corresponding period. Therefore, he required the assessee to show-cause as to why an amount of Rs. 32,95,000 should not be added as income from undisclosed sources under Section 68 of the Act. In response to the show cause notice, the assessee filed his reply on 16.12.2019 stating that the cash deposits of Rs. 32,50,000 were made out of sale proceeds and past savings. The contention of the assessee was not convinced the Assessing Officer. The Assessing Officer taking note of the fact that the assessee having cash in hand of Rs. 3,23,741 out of which Rs. 3,00,000 was considered to be the cash available with the assessee as on 19.11.2016. The Assessing Officer also accepted part of cash sales to the extent of Rs. 1,70,000 and concluded that the cash deposits aggregating to Rs. 28,25,000 remained unexplained and accordingly addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. Bala Jewelers Ltd. in ITA No.352/Del/2021 dated 09.06.2023 and also the decision of the Delhi High Court in the case of PCIT vs Agson Global Pvt. Ltd. 441 ITR 550. 6. On the other hand, learned Departmental Representative strongly supported the orders of the authorities below. 7. Heard rival contentions, perused the orders of the authorities below and the material placed before me. 8. In the course of assessment proceedings, the Assessing Officer required the assessee to explain the cash deposits of Rs. 32,95,000 made in the bank account during the demonetization period, the assessee explained that this amount was deposited out of sale proceeds and past savings, thus, the assessee also furnished letter dated 16.10.2019 furnishing various details called for by the Assessing Officer. The information/documents furnished by the assessee are as under: "Dear Sir, With reference to your Notice No. ITBA/AST/F/2019- 20/1018648636(1) dated 07.10.2019, where your good self has stated that information asked for vide Notice No. ITBA/AST/F/142(1)/2019-20/1017941988(1) dated 12.09.2019 has not been filed in full now we are submitting herewith the balance details:-" Point No. 4 Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l increase in cash sales made during the year and with comparison to the cash sales made by the assessee in the previous assessment year. The analysis made by the Assessing Officer that the cash sales corresponding to the period from April 2016 till 08.11.2016 were more than the cash sales during the period from 01.04.2015 to 08.11.2015 is the only basis for disbelieving the cash sales. It is noticed that the Assessing Officer himself accepted part of the cash sales by assuming that the assessee might have made cash sales to the extent of Rs. 1,70,000. 10. Having accepted the purchases, part sales and the stocks shown by the assessee in the books of accounts and without rejecting the books of accounts, the Assessing Officer is not justified in disbelieving the cash sales made by the assessee simply because the cash sales or more than the cash sales for the corresponding period of the previous year. The Mumbai Bench of the Tribunal in the case of ACIT vs. Ram Lal Jewellers Pvt. Ltd. (supra) also considered an identical situation and the Tribunal held as under: "12. We find that the only reason given by the ld. AO for treating the entire cash deposited in the bank account is that, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated as deposits made out of any undisclosed income. 14. Addition u/s. 68 on account of cash deposits cannot be made simply on the reason that during the demonetization period, cash deposits vis-a-vis cash sales ratio is higher. If the parties during the period of demonetization has purchased huge quantity of jewellery on cash which has been duly recorded in the books of accounts of the assessee and also tallying with the quantity of stock, then simply because there was a huge cash sales in that particular month cannot be the reason for treating it as undisclosed income from undisclosed sources. Here in this case the parties to whom notices u/s. 133(6) were issued have confirmed the purchases but also filed the purchase bills. The ld. AO cannot disbelieve the purchases made from the assessee simply on the ground that those parties could not submit the source of their funds which is not the requirement of the assessee to prove specifically when assessee is a retail seller of jewellery and even law does not prohibit any cash sales or there is any requirement to seek any further detail. For this compliance assessee has also filed Form 61A before the ld. AO. Once, it has been est ..... X X X X Extracts X X X X X X X X Extracts X X X X
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