The Tax Publishers2022 TaxPub(DT) 4078 (Hyd-Trib)

INCOME TAX ACT, 1961

Section 69A

Perusal of months-wise cash sales and cash deposits made by assessee in the bank showed that cash sales made by assessee during every month was substantial. Similarly, cash deposit made by assessee in the Bank A/c from April, 2015 to Nov.2015 and thereafter was also commensurate with the regular trend. It was not a case where assessee in this particular period made substantial cash deposits in the Bank A/c. Therefore, addition made by AO was not sustainable.

Income from undisclosed sources - Addition under section 69A - Cash deposits into bank account during demonetization period - Deposit was commensurate with regular trend

AO noticed that assessee deposited an amount of Rs.30 lakhs in cash during demonetization period in old denomination i.e. Rs.1,000 currency notes in his bank a/c held with Indian Overseas Bank. On being asked to explain the source of such deposit, assessee explained the same as out of sale proceeds of business. According to AO, since the old denomination currency, i.e., Rs.1000 and Rs.500 notes were banned by the Govt. of India from 8-11-2016 midnight, therefore, sale proceeds received in old denomination, as admitted by the assessee himself, could not be treated as receipt from the business. He, therefore, held that the amount to the tune of Rs.30 lakhs stood unexplained. Accordingly, AO made addition of Rs. 30 lakhs under section 69A. Held: Perusal of months-wise cash sales and cash deposits made by assessee in the bank showed that cash sales made by assessee during every month was substantial. Similarly, cash deposit made by assessee in the Bank A/c from April, 2015 to Nov.2015 and thereafter was also commensurate with the regular trend. It was not a case where assessee in this particular period made substantial cash deposits in the Bank A/c. Therefore, addition made by AO was not sustainable.

Applied:of Pr. CIT v. Agson Global (P) Ltd. (2022) 441 ITR 550 (Del-HC) : 2022 TaxPub(DT) 652 (Del-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2017-18


INCOME TAX ACT, 1961

Section 143(3)

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