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TMI Blog2022 (11) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... sion, we see no reason to interfere with the order of the CIT(A). Appeal of the revenue is dismissed. - ITA No.552/Bang/2022 - - - Dated:- 31-10-2022 - Shri George George K., Judicial Member And Ms. Padmavathy S, Accountant Member For the Appellant : Shri Gudimella V P Pavan Kumar, Jt.CIT(DR)(ITAT), Bengaluru For the Respondent : Shri S.V. Ravishankar, Advocate ORDER PER PADMAVATHY S., ACCOUNTANT MEMBER This appeal by the revenue is against the order of CIT(Appeals), National Faceless Assessment Centre, Delhi [NFAC] dated 2.8.2021 for the AY 2017-18. 2. The revenue raised the following grounds:- 1. Whether in the facts and circumstances of the case and in law, the Ld. CIT(A) was right in deleting the addition made u/ s. 68 of I T Act even though assessee had accepted specified bank notes without maintaining the complete account of record of stock, sale of transaction made with the specified bank notes and records of the persons with whom sales have been effected in SBNs towards 'production of doctor's prescription and proof of identity' as mandated by Notification no. S.O. 3408(E) dated 08-11-2016. 2. Whether in the facts and circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... condoned. 4. We have heard the rival submissions on the condonation of delay in fling the appeal. Following the Supreme Court decision of Collector, Land Acquisition Vs. MST. Katiji and Others (1987) 167 ITR 471 (SC) , we are of the view that there was reasonable cause for the delay in filing the appeal and condone the delay. 5. The assessee is a partnership firm engaged in the business of selling pharmaceutical products. The assessee filed the return of income for the AY 2017-18 on 23.9.2017 declaring a total income of Rs.4,44,70,210. The case was selected for scrutiny for the purpose of verification of large value of cash deposits during demonetisation and accordingly notices were issued to the assessee. After verification of the details submitted by the assessee, the AO proposed to make an addition u/s. 68 of the Act as unexplained cash towards cash deposits made during the demonetisation period. The assessee furnished its reply that as per the RBI guidelines, any pharmacy, medical shop was one of the specified entities/persons permitted to accept Special Bank Notes [SBN] of Rs.1,000 and Rs.500 towards sale of medicines. The assessee also submitted that there was an ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It has been observed that the appellant is filing VAT returns and the sales and purchases have all been accounted for and taxes have been duly paid to the government by the appellant. Hence the Assessing Officer was not justified to treat the cash sales as unexplained credits. From the above, it can be construed that the Appellant in the instant case offered its explanation regarding the source of the cash sales. However, the Assessing Officer did not give any contradictory findings as regards the explanation offered by the Appellant. The Assessing Officer could reject the explanation offered by the Appellant with reference to any mistakes pointed out from the books of account. Therefore, it is clearly understood that there was no ground for the Assessing Officer to invoke the provisions of Section 68 of the Act in the case of the appellant. In view of the forgoing discussion and taking into consideration of all facts and circumstances of the case it is hereby held that the addition made by the Assessing Officer u/s. 68 of the Act is unwarranted and not maintainable as per law. Accordingly, the Assessing Officer is directed to delete the addition of Rs.2,12,05,4291- made u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the appeal in favour of the assessee. 12. We have heard the rival submissions and perused the material on record. We notice that the assessee during the course of assessment has produced various details including the books of accounts, VAT returns, details of cash deposits made in the requisite format and other details called for by the AO. In the order of assessment, the AO has brought to tax the impugned addition u/s. 68 by stating that 3.7 I have carefully gone through the reply of the assessee. The assessee has made cash deposit during demonetization period of Rs. 2,18,38,160/-. On verification of the e-filed cash book it is seen that cash balance as on 08/11/2016 is Rs. 6,32,731/-. From this it is clear that the assessee has made cash deposit of Rs. 2,18,38,160/-, out of opening cash balance as on 08/11/2016 of Rs. 6,32,731/- cash sales from 09/11/2016 to 31/12/2016 of Rs. 2,12,05,429/- . 3.8 As per RBI notification vide no. SO 3416(E) dated 09/11/2016 and subsequent SOs it is clearly mentioned that For making payments in all Pharmacies on production of doctor's prescription and proof of identity ,. However, the assessee in the reply has stated that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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