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TMI Blog2023 (10) TMI 912X X X X Extracts X X X X X X X X Extracts X X X X ..... a sudden is increase in transactions during the demonetization. But then announcement of such a scheme is also not a regular feature and once such scheme is announced there has to be counter effects to such schemes and business concerns have to arrange their affairs accordingly. For instance normally the period of receiving outstanding amount from debtors is 2 to 3 months but when such scheme is announced each person tries to get free from the liabilities and available cash in hand. There is a chain reaction when such scheme is announced and there has to be an increase in the cash transactions of a business entity. On going through the sample purchase and sale bills, VAT audit reports, month -wise cash deposit and banks month wise cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the preceding years. The assessee also submitted the stock statements and books of accounts related to the manufacturing unit. The ld. Assessing Officer carried out the investigation about the genuineness of the sale transactions and sent notices to the customers but could not get satisfactory reply. The ld. Assessing Officer also observed that there is a considerable i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceding 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 complete details and documentary evidences. It was also submitted that the assessee deals in mosquito net fabric wherein most of the transactions are done in cash. The sales made during the period were subjected to charging of sales tax and the same have been duly paid. The sundry debtors are mostly located in remote areas and small villages and small sales being made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 demonetisation period as unexplained cash credit and adding it to the income of the assessee. We notice that the assessee is a private limited company and engaged in the business of manufacturing mosquito net fabric for the past many years. Audited financial statements for the year under appeal and the preceding years have been filed. The revenue from operation for fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat 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 Marketing, complete details have been filed to show that it is a genuine concern and the purchases made from it are genuine. The major reason for the Assessing Officer to suspect the sales as well as the huge cash deposit are for the reason that there was a demonetisation scheme announced during this period. It is an admitted fact that there is an increase in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 genuineness of the cash sale transactions made during the demonetisation period. Therefore, since all the cash transactions have duly been reflected in the gross sales during the year, purchases are not in dispute, net profit has been offered as per the past trend, no other defect has been pointed out by the Assessing Officer in the books except the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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