9911796707
TMI Blog2023 (10) TMI 912X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the case are that the assessee is a private limited company engaged in the business of manufacturing of the mosquito nets. Return of income for Assessment Year 2017-18 filed on 13/10/2017. Case of the assessee selected for scrutiny by issuing notice under section 143(2) and 142(1) of the Act. During the course of assessment proceedings the ld. Assessing Officer asked the assessee to explain the source of cash deposit during the demonetisation period in the bank account held with Oriental Bank of Commerce amounting to Rs. 61,51,000/-. It was submitted by the assessee that the assessee makes regular cash sales and the cash is received from its customers against the outstanding balances on account of sales made during the year and in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of necessary evidence and accordingly confirmed the action of the ld. Assessing Officer treating the total credit of Rs. 65,31,286/- as unexplained credit u/s 68 of the Act. 3. Aggrieved the assessee is now in appeal before this Tribunal. 4. The ld. Counsel for the assessee referring to the detailed paperwork containing 179 pages, which includes the financials of preceding and current year, copy of bank statement, sample purchase/sale built, VAT audit report, month-wise cash deposit in bank and month-wise cash receipt during the year. He also took us through the detailed written submissions from page 162 to 179 of the paper book. It was submitted that the assessee has explained the cash deposit made during the demonetisation period with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of this contention, reliance was placed on the decision of the Co-ordinate Bench of ITAT Visakhapatnam Bench in the case of ITO v. Sri Tatiparti Satyanarayana in ITA No.76/Viz/2021 order dated 16.03.2022 and that of the ITAT Chennai Bench in the case of Mrs. Umamaheswari vs. ITO in ITA No.527/Chny/2022; Assessment Year: 2017-18, order dt. 14.10.2022. 5. On the other hand, the ld. D/R, vehemently argued supporting the order of both the lower authorities. 6. We have heard rival contentions and perused the material placed before us. The sole issue raised in the instant appeal by the assessee is that the ld. CIT(A) has erred in confirming the action of the Assessing Officer treating the cash sales of Rs. 65,31,286/- during the demonetisati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifically examined the sale transactions during the period and after certain verification observed that in most of the cases addresses are insufficient and the sales could not be verified. On this account of non-verification of sales during demonetisation period, the ld. Assessing Officer added the total sales to the income of the assessee. 7. We notice that the ld. Assessing Officer on the one hand has accepted that the assessee makes regular cash sales but only disputed those made during the demonetisation period. The purchases made by the assessee are not in dispute and sufficient evidence have been filed to explain the genuineness of the purchases. In respect of major vendor from whom the assessee made purchases i.e., Sri Balajee Market ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.47 Crores, the outstanding debtors have scaled down to Rs. 49 Lakhs only. In other words debtors have come down from Rs. 76 lakhs approx. from preceding financial year to Rs. 49 Lakhs, even when the sales have increased from Rs. 2.21 Cr. to Rs. 3.47 Cr. These figures in itself indicate that assessee has recovered its debts at a much higher speed than it normally does. The effect of the same is visible in the financial statement for the year under appeal. The assessee normally makes cash sales of small amounts to various customers which are in huge number. On going through the sample purchase and sale bills, VAT audit reports, month -wise cash deposit and banks month wise cash receipt during the year, we do not find any reason to doubt the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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