9911796707
TMI Blog2025 (4) TMI 993X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessment year 2017-2018 on 30.10.2017 declaring total income at Rs. 15,54,000/-. The case of the assessee was selected for complete scrutiny under CASS for the reasons i.e., abnormal increase in cash deposits during demonetization period as compared to pre-demonetization period. Accordingly, notice u/sec.143(2) of the I. T. Act, 1961 was issued and called-upon the assessee to file relevant evidences in respect of source of cash deposits. In response, the assessee filed his reply referring to the nature of business along with copy of statement of bank accounts, computation of income, balance-sheet, P & L A/c, audit report, month-wise statements of cash deposits and cash sales for the financial years 2015-2016 and 2016- 2017 and cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the year under consideration. Further, the source for cash deposit is out of sales declared for the year under consideration which are supported by necessary bills and books of accounts maintained and as per cash book available in hand as on 08.11.2016 was more than the amount of cash deposited during demonetization period. Therefore, submitted that Assessing Officer was erred in making addition as unexplained cash credits. The learned CIT(A) after considering the relevant submissions of the assessee and also taking note of relevant facts observed that, there is unexplained spurt in the sales during demonetization period which is beyond preponderance of probability. Further, although, the assessee has filed relevant evidences including ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the sales bills complete information of purchases are not referred ignoring the fact that if the sale value is less than Rs. 2 lakhs the assessee need not to maintain KYC of the purchasers and further, the assessee is dealing in goods where the sale value is higher and where the purchase bills are issued with handwritten bills. Therefore, merely for the reason of non-availability of certain details in the sale bills, the genuineness of the sales cannot be doubted and additions cannot be made towards cash deposit when the assessee has explained the source. Learned Counsel for the Assessee further submitted that if we consider the additions made by the Assessing Officer towards cash deposit, it amounts to double addition because the sales h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sit out of cash sales declared in the books of accounts. In fact, there was a cash deposit of Rs. 65,11,500/- in the current account of the assessee maintained with Mahesh Bank, Himayatnagar and as against this, available cash in hand as per cash book maintained by the assessee as on 08.11.2016 was at Rs. 80,53,566/-. The assessee has explained the source for cash deposit out of cash in hand available as per books of accounts which is further supported by sales declared for the month of October and November, 2016. The assessee has filed a comparative chart of total sales, cash sales, cash deposited for the period from April, 2016 to November, 2016 and also the corresponding period of previous financial year. The assessee had also filed thre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11.2016, as per the cash book maintained for the period, in our considered view, the explanation of assessee with regard to source for cash deposit into bank account during demonetization period ought to have been accepted by the Assessing Officer. The learned CIT(A), without considering the relevant facts, simply sustained the additions made by the Assessing Officer towards cash deposit as unexplained cash credits u/sec.68 of the Act. Thus, we set aside the order of the learned CIT(A) and direct the Assessing Officer to delete the additions made towards cash deposit u/sec.68 of the Income Tax Act, 1961.
8. In the result, appeal of the Assessee is allowed.
Order pronounced in the open Court on 16.04.2025 X X X X Extracts X X X X X X X X Extracts X X X X
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