9911796707
TMI Blog2025 (5) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... t explanation offered by the assessee for sources of cash deposits during the demonetization period was not found to be satisfactory during the assessment proceedings. 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) has ignored the fact that assessee has taken facility of the cash credit and paid interest on the same of Rs. 19,26,233/- for the year under consideration whereas, the assessee has claimed that the firm has cash-in-hand as on 31.10.2016 of Rs. 1,72,36,494/- is not acceptable as the explanation of the assessee is against the principle of the business and no prudent businessman can have such a huge fund idle and taking interest bearing loan. Therefore, the findings of the AO in this case regarding the unexplained cash deposits is required to be sustained. 4. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition made by the AO by accepting the contention of the assessee that such huge amount was kept as cash-in-hand to meet unexpected business exigencies from April to October, 2016 (pre-demonetization period) whereas, assessee has not given any explanation for not keeping such huge amount for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stantial amount as cash in hand. The assessee has stage managed the cash book to give colour of genuineness to its cash deposits during the demonetization period. Hence, the AO made addition of the entire cash deposit of Rs. 2,50,51,450/- in HDFC bank during the year including Rs. 1,68,00,000/- during the demonetization period to the total income as unexplained cash credit u/s 68 of the Act and taxed the same @ 60% u/s 115BBE of the Act. 4. Aggrieved by the order of AO, the assessee took up the matter before the CIT(A). The appellant filed detailed written submission on 15.01.2024 and enclosed cash book, bank books, bank statements, day-to-day cash book in excel sheet, copy of VAT returns, acknowledgement of response on IT portal for cash deposit during demonetization and relied upon various decisions. The CIT(A) has reproduced submission of the appellant at pages 5 to 31 of the appellate order. He has given his findings at para 5 from page 32 to 41 of the appellate order. He has noted that the turnover of the appellant was Rs. 23,76,06,343/- and the total cash deposit during the whole year including the demonetization period was Rs. 2,50,51,450/-. The entire cash deposit of the y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied on the order of the AO. He submitted that the appellant has paid huge interest of Rs. 19,26,233/- to HDFC Bank wherein cash of Rs. 2,50,51,450/- was deposited during the year. There was no need to keep such huge cash in hand and borrow interest bearing money from bank. He also submitted that assessee has shown loss return of Rs. 3,52,076/- during the year. There was no commercial expediency to keep huge cash while borrowing interest bearing funds from the banks. In view of these facts, the ld. Sr. DR urged that the order of CIT(A) may be set aside and the order of AO should be restored. 6. On the other hand, learned Authorized Representative (ld. AR) for the assessee strongly supported the order of the CIT(A). He has filed two paper books giving details of bank statement, cash book and month-wise details of cash expenses. He has also relied on various decisions in favour of assessee's concerned. He submitted that the assessee had deposited Rs. 1,68,00,000/- on 15.11.2016 in its bank account with HDFC Bank. The said deposit was out of the cash available with the assessee from various cash withdrawals during the year from the same bank account. He submitted that the turnover of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AR. Ground Nos. 1, 2 and 4 are inter-related and hence are discussed and decided together. The case of the assessee was selected for scrutiny under CASS for the reason of large cash deposit during demonetization period as compared to pre-demonetization period. During the assessment proceedings, assessee had filed reply in the online portal of the Department and had submitted cash book, bank statement, audit report, P&L account etc. The AO found that assessee had deposited cash of Rs. 2,50,51,450/- during the year in HDFC bank including Rs. 1,68,83,951/- during demonetization. The assessee, in its reply, submitted that it had been regularly withdrawing cash from the bank and the same was available as cash in hand, which was re-deposited during demonetization as well as non-demonetization period. The AO did not accept the explanation of the assessee by stating that it had paid interest to the same bank where it has deposited such huge cash. Further, keeping such huge cash was not a business requirement of the assessee. The assessee also failed to substantiate its turnover of Rs. 23,76,06,343/- with sufficient documentary evidence. Hence, he added the entire cash deposit of Rs. 2,50, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various amounts of interest debited towards CC limit in its bank A/c No.50200005801762 with HDFC Bank. The total interest comes to Rs. 19,26,233/-. The AO observed that assessee has incurred huge interest expenses but at the same time it has kept the cash withdrawn in hand to re-deposit the same in the bank account. In this regard, the ld. AR submitted that it is not open to the Department to prescribe what expenditure assessee should incur and in what circumstances it should incur that expenditure. The cash was accumulated by the assessee from 01.04.2016 onwards in the expectation of business requirement/contingencies. The appellant has however failed to substantiate its explanation by providing any credible documentary evidence. It has not furnished any evidence that such an emergency even arose in the past which entailed interest outgo of such huge amount. The appellant has withdrawn cash of Rs. 2,57,18,000/- upto 31.10.2016 and had deposited Rs. 2,54,17,500/- including Rs. 1,68,00,000/- during demonetization period. The appellant had also deposited cash in the bank account on different occasions amounting to Rs. 86,17,500/- prior to the demonetization period. Such pattern of w ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
