9911796707
TMI Blog2023 (12) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... ied bank notes after 08.11.2016. We find that this issue is covered in favour of the assessee by the decision of ITAT, Chennai Benches in the case of M/s. Micky Fireworks Industries vs ACIT [ 2023 (8) TMI 217 - ITAT CHENNAI] where the Tribunal under identical set of facts deleted additions made by the Assessing Officer, asheld that cash so received by the assessee is backed by sales carried out by the assessee as recorded in the books of accounts. Therefore, the source of cash is duly explained. The provisions of Sec.68 could be invoked only in cases when there was unexplained cash credit in the books of accounts maintained by the assessee. However, the assessee has duly identified the debtors from whom the cash was received and the same could not be disputed by lower authorities. The PAN of respective debtors as well as quantum of cash realized from each of them has duly been detailed by the assessee before Ld. AO during assessment proceedings. No defect has been pointed out in the books of accounts. In such a case, the credit could not be held to be unexplained cash credit. Appeal filed by the assessee is partly allowed. - SHRI MAHAVIR SINGH, HON BLE VICE PRESIDENT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s.68 without any basis. The learned CIT (A) erred in not considering the scope and effect of the specified bank Notes (cessation of liabilities) Act dated 28/02/2017 properly. The Appellant relies on the decisions in the following cases: i) Rahul Cold Storage, Gunderdehi Road, Vill-potiyadih, Dhamtari (C.G) - 493 773(IT A.No. 123/RPR/2022) ii) Manasa Medicals, JPN Road, Shivamogga. (IT A.No. 552/Bang/2022) iii) Mrs.Umamaheswari, D.No.12A, Perumal Konar Street, VPC Nagar, Coimbatore South, Coimbatore. (ITA No.527/Chny/2. 3. The brief facts of the case are that, the assessee, M/s. Amar Sparklers Factory, filed its return of income for the assessment year 2017-18 on 28.02.2019, admitting an income of Rs. 6,59,610/-. The case was selected for scrutiny to verify huge cash deposits during demonetization period and accordingly, notice u/s. 143(2) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) dated 20.08.2018, was issued and duly served on the assessee. During the course of assessment proceedings, the AO obtained details of cash deposits to State Bank of India, SME Branch, Sivakasi, IDBI Bank, Sivakasi, Axis Bank, Sivakasi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demonetization period. Therefore, once source is explained for cash deposits, then no addition can be made u/s. 69A of the Act. The ld. CIT(A), without appreciating relevant facts simply discussed the issue of cash shortage at Rs. 6,62,783/-, but there is no findings in so far as cash received from group concerns amounting to Rs. 20,40,000/-. Therefore, the ld. Counsel for the assessee submitted that additions made by the AO should be deleted. 6. The ld. Sr. AR, Shri. P. Sajit Kumar, JCIT, submitted that the assessee could not explain source for cash deposits to the tune of Rs. 6,62,783/-, which is clear from cash flow statement filed by the appellant during assessment proceedings. Further, although assessee claims to have received Rs. 20,40,000/- as advance during demonetization period from group concerns, but such advance has been received in specified bank notes after 08.11.2016 in violation of Circular/notification issued by RBI. Therefore, the AO has rightly rejected explanation offered by the assessee and made additions towards cash deposits u/s. 69A of the Act and their order should be upheld. 7. We have heard both the parties, perused materials available on record and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ales tax assessment order, monthly cash deposits and credits for various periods, ledger account for purchase and other expenditure, monthly sales gross receipts, monthly purchases, details of old notes and new notes deposited during demonetization period, the day book, Cash book, ledger maintained for business, cash balance as per cash book etc. All these details were duly submitted by assessee vide reply dated 12-12-2019. The assessee also submitted month-wise cash deposits in all bank accounts, details of old notes deposited at the time of demonetization period. Pertinently, the assessee also furnished details of name, address and PAN of cash depositors who deposited cash during demonetization period. The same has been detailed on pages 24 to 35 of the paper book. Apparently, the same could not be faulted with by Ld. AO. There is no allegation of any irregularity in the books of accounts. 6. We find that the only reasoning to treat the said deposits as unexplained cash credit u/s 68 is that the assessee was debarred from dealing in SBN after 08-11-2016. However, in the present case, the cash so received by the assessee is backed by sales carried out by the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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