2024 (7) TMI 1579

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..... Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 25-09-2023 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 20-12-2019. The sole grievance of the assessee is c .....

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..... oceedings before lower authorities 3.1 During the course of assessment proceedings, it was noted that the assessee deposited Specified Bank Notes (SBNs) of Rs.127.46 Lacs during demonetization period. As on 08-11-2016, the assessee was having cash balance of Rs.36.81 Lacs. The assessee submitted that deposits were sourced out of cash sales and collection from debtors. However, Ld. AO held that t .....

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..... efect was pointed in the same. The books were not rejected u/s 145(3). Further, CBDT brought out Standard Operating Procedure for AO to handle demonetization case vide circular dated 09-08-2019 specifically instructing AO to make comparative analysis of cash sales, cash deposits year-wise. The Ld. AO did not carry out any such exercise and did not point out any unusual increase in cash sales as co .....

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..... principal supplier. The assessee has deposited cash of Rs.128.71 Lacs during demonetization period which has partly been accepted. The Ld. AO has made addition only for those deposits which are in SBNs. However, the fact would remain the same that those cash has been generated out of business activities only since the assessee do not have any other source of income. Such cash collections form part .....

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..... essee could not fully substantiate the source of cash deposit with sufficient documentary evidences. In the present case, Ld. AO has not followed the prescribed standard operating procedure. Further, Ld. AO has reduced merely the profit margins on sales while making impugned additions. The said working would assume that the purchases were also not genuine which was never the case of Ld. AO. Theref .....

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