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TMI Blog2025 (4) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... t "abnormal cash deposits during the demonetisation period" were reported. As per the information available to the AO, the assessee had deposited an amount of Rs. 2,32,00,000/- in cash into its bank account during the window permitted for SBN deposits. This deposit was found to be disproportionately high when compared with cash transactions and bank activity in the preceding periods, thereby triggering scrutiny. The AO, in the assessment order, observed that during the demonetisation period, many assessee's across the country adopted certain common methods to bring unaccounted money into the books of account by showing Bogus cash sales, allegedly made in the days or weeks preceding demonetisation; Cash advances or loans from untraceable persons; Suppressed or back-dated entries in books to justify sudden cash availability; showing recycling of earlier bank withdrawals, with no credible explanation as to how the funds were kept in custody for several months. In the present case, the assessee claimed that the cash deposits were sourced from: * Rs. 1.20 crore withdrawn from bank in July 2016, which was purportedly retained in cash and deposited back during demonetisation, and * Ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in deleting the addition made to the tune of Rs. 4,51,379/- on account of difference in GP (estimated by AO and that declared by the assessee) without appreciating the facts of the case. 3. Whether the Id. CIT(A) has erred in not rejecting the books u/s. 145 of the Act, in spite of the the abnormalities pointed out by the Assessing Officer in his order. 4. The appellant craves leave to amend or alter any ground or add a new ground, which may be necessary. 5. It is, therefore, prayed that the order of Ld. CIT(A) may be set aside and that of the Assessing Officer be restored. 5. During the course of hearing before us the Departmental Representative (DR) strongly opposed the order passed by the learned CIT(A) and submitted that the learned CIT(A) has erred both on facts and in law in deleting the addition of Rs. 2,32,00,000/- made under section 68 read with section 115BBE of the Act and further erred in deleting the addition of Rs. 4,51,379/- made on account of low gross profit. The DR submitted that the AO had carried out detailed examination and brought on record significant abnormalities in the books of account of the assessee, including- but not limited to-the following: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the file of the AO for fresh verification and adjudication in accordance with law, especially in light of the sensitive context of demonetisation and the cash deposits made during that period. 6. In response to the arguments advanced by the learned Departmental Representative (DR), the learned Authorised Representative (AR) appearing on behalf of the assessee strongly refuted the contention that any new evidence was filed for the first time before the learned CIT(A). The AR submitted that no fresh or additional evidence was furnished before the CIT(A) which was not already part of the record before the Assessing Officer. It was clarified that all the details and explanations considered by the CIT(A) were already submitted during the course of assessment proceedings and form part of the assessee's paper book filed before the lower authorities. The AR took the Bench through the paper book and pointed out specific submissions and documentary evidence filed before the AO, including: * Ledger account of Ratnakar Bank Ltd. from which cash withdrawals were made. * Details of cash deposits during the demonetisation period. * Monthly stock statement showing description of goods, q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its of Rs. 2.32 crores made by the assessee during the demonetisation period, which the Assessing Officer treated as unexplained under section 68 of the Act. The AO was of the view that the cash withdrawals of Rs. 1.20 crores from the bank made in July 2016 were not credibly explained and that the cash sales of Rs. 1.12 crores in October 2016 appeared to be a post-facto justification. The learned CIT(A), however, examined the entire record and found that the assessee had explained the deposits through two sources: (i) cash withdrawn from bank in July 2016, and (ii) cash sales of gold ornaments during October 2016. The explanation was backed by entries in the cash book, ledger accounts of Ratnakar Bank, VAT returns, purchase register with quantity details, and stock statements. It was further demonstrated by the AR that URD purchases made in July 2016 were paid through banking channels, and not from the withdrawn cash, which remained available in hand until redeposit. No adverse finding was recorded by the AO on the assessee's cash book, which showed adequate cash balance. The AO failed to point out any defect in the books of account or contradictions in the documentary record. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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