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TMI Blog2025 (4) TMI 1615X X X X Extracts X X X X X X X X Extracts X X X X ..... pheld. 2. The assessee has raised the following ground of appeal: "That in the facts and circumstances of the case, the learned Assessing Officer was not justified in holding the cash receipts for the month of October 2016 and from 01.11.2016 to 08.11.2016 amounting to Rs. 1,40,05,602/- as inflated and thereby taxing the same under Section 69A of the Income Tax Act, 1961. The addition made is absolutely illegal and not sustainable in the eyes of law. That the order of the learned AO is bad in law and on facts." 3. The assessee is engaged in the trading/sale and purchase of food grains and Karyana items under the name and style of M/s Jeewan Nath Jagan Nath. The return of income for the relevant year was filed declaring a total income of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee had inflated cash sales to explain the cash deposits post-demonetization. 8. Based on detailed working, it was concluded, by the Assessing Officer that an amount of Rs. 1,40,05,602/- (comprising Rs. 89,46,883/- for October 2016 and Rs. 50,58,719/- for 01.11.2016 to 08.11.2016) represented inflated cash receipts. This amount was added under Section 68 of the Act, alternatively under Section 69A, and the assessed income was determined at Rs. 2,10,01,442/-. 9. Aggrieved by the assessment order, an appeal was preferred before the CIT(A). Written submissions were made by the assessee wherein it was contended that all cash transactions were duly recorded in the books of account, and cash receipts during festive seasons were higher by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely trading of food grains, and the assessee's turnover during the year under consideration exceeded Rs. 31 crores. The Ld. AR submitted that the cash deposited in the bank account was on account of seasonal sales arising during the Diwali festival, which coincided with the demonetisation period. It was submitted that the assessee had provided party-wise details of cash received and payments made before the Ld. Assessing Officer as well as the Ld. CIT(A). It was contended that the entire money was deposited in one go in the bank account and utilised for making vendor payments. 15. The Ld. AR also submitted that all the entries pertaining to the cash deposits were duly reflected in the books of account. Therefore, the view taken by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd proceeded to make an addition on the assumption that cash deposits were made out of demonetized currency. 19. However, there is no material on record to show that the sales were inflated or that the deposits were made out of unaccounted cash. It is noted that the assessee's cash book, stock register, and VAT records were duly produced and verified, and no discrepancies were pointed out therein. It is also noted that the festive season of Diwali, which generates higher sales, coincided with the demonetization period, unlike the preceding year when the timing differed. Therefore, a mere comparison with previous years' figures without considering the seasonal impact is not sufficient to draw an adverse inference. 20. Further, the cash ..... X X X X Extracts X X X X X X X X Extracts X X X X
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