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TMI Blog2024 (6) TMI 1206X X X X Extracts X X X X X X X X Extracts X X X X ..... ition made by the Assessing Officer under Section 69A requires deletion, for the reason that the said section is applicable only when the said sum is not found credited in the books of account maintained by the Appellant. 4) The Assessing Officer and the Learned First Appellate Authority erred in observing that the Appellant should not have received Specified Bank Notes after 08/11/2016 till 31/12/2016 without considering the effect of Section 3 of the Specified Bank Notes (Cessation of Liabilities) Act, 2016. 5) Without prejudice, the Assessing Officer and the Learned First Appellate Authority erred in treating the Cash Deposits as Income of the Appellant, despite accepting the fact that the same were received from customers only in the course of business of the Appellant, more particularly when the same were duly recorded in the books of account, which were not rejected or found to be incorrect and incomplete and when the income returned was also accepted by them. [Relying on the decisions of the Hon'ble Chennai ITAT in ITA No.527/Chny/2022 dated 14/10/2022 and ITA No. 264/Chny/2023 dated 26/07/2023]. And for other grounds of appeal that may be adduced at the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The relevant findings of the AO are as under : 5. Being aggrieved by the assessment order, the assessee preferred an appeal before the Ld.CIT(A). Before the Ld.CIT(A), the assessee has reiterated his submissions made before the AO towards source for cash deposits during demonetization period and also took support from the Specified Bank Notes (Cessation of Liabilities) Act, 2017. The assessee further submitted that he has submitted all details to prove source for cash deposits during demonetization period and also explained how cash receipts out of sales received from 09.11.2016 to 31.12.2016, is not in violation of Circulars issued by RBI & Government of India. 6. The Ld.CIT(A) after considering relevant submissions of the assessee and also taken note of certain judicial precedents, rejected arguments of the assessee and upheld additions made by the AO towards cash deposits u/s.69A r.w.s.115BBE of the Act, by holding that the assessee could not file any evidences like month wise sales/purchases for FYs 2015-16 & 2016- 17, stock register, and other details to fully substantiate his claim of the cash deposits from sale of materials only. Since, the assessee failed to prove onus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Government of India & RBI prohibits acceptance of demonetized currency from 08.11.2016 onwards. The Ld.DR further submitted that although, the RBI has allowed acceptance of SBNs for specified persons, but the assessee is not coming under exempted category person, and thus, the claim of the assessee that it has accepted demonetized currency from 09.11.2016 to 31.12.2016 is contrary to Circular issued by RBI, and thus, the AO has rightly rejected the explanation of the assessee and made additions towards cash deposits u/s.69A of the Act. 9. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. The facts borne out from the record clearly indicate that the assessee is running a dhall mill and manufacturing various kinds of dhalls. The facts brought on record by the AO further indicated that the assessee procures various kinds of pulses from local market and manufacturing into various kinds of dhalls and sells to unregistered dealers in cash. The assessee has filed comparative cash sales and cash deposits into bank account for FY 2015-16 & FY 2016-17 and also cash sales and cash deposits for the month of October & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 11.10.2023, where the Tribunal after considering relevant facts has held as under : 7. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. In so far as addition of Rs. 6,62,783/-, we find that the assessee itself has admitted shortage of source in their cash flow statement filed before the AO. Therefore, from the above, it is undoubtedly clear that the assessee could not explain source for cash deposits to the extent of Rs. 6,62,783/- and thus, we are of the considered view that, there is no error in the reasons given by the CIT(A) to sustain additions made towards cash deposits to the tune of Rs. 6,62,783/-. In so far as addition of Rs. 20,40,000/- towards advance received from group concerns, it was an argument of the appellant that group concerns have paid advance in cash during demonetization period and deposited into IDBI bank account. In this regard, the appellant has filed necessary details including PAN nos. and confirmation letters from the group concerns to prove receipt of trade advance. The Assessing Officer has not disputed these facts, however made additions only on the ground that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealing in SBN after 08-11-2016. However, in the present case, the cash so received by the assessee is backed by sales carried out by the assessee as recorded in the books of accounts. Therefore, the source of cash is duly explained. The provisions of Sec.68 could be invoked only in cases when there was unexplained cash credit in the books of accounts maintained by the assessee. However, the assessee has duly identified the debtors from whom the cash was received and the same could not be disputed by lower authorities. The PAN of respective debtors as well as quantum of cash realized from each of them has duly been detailed by the assessee before Ld. AO during assessment proceedings. No defect has been pointed out in the books of accounts. In such a case, the credit could not be held to be unexplained cash credit and the impugned additions are not sustainable in law. 7. The SMC bench of this Tribunal in Mrs. Umamaheswari Vs. ITO (supra), on identical facts, deleted similar additions on the ground that the assessee had duly evidenced the source of cash deposit and therefore, addition could not be made u/s 68. Similar is another decision of SMC Raipur Bench in Rahul Cold Storage ..... X X X X Extracts X X X X X X X X Extracts X X X X
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