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TMI Blog2024 (5) TMI 1073X X X X Extracts X X X X X X X X Extracts X X X X ..... Kapoor, Ms. Ananya Kapoor, Shri Tarun Chanana Shri Shivam Yadav, Advocates For the Respondent : Shri Om Prakash, Sr. DR ORDER 1. This appeal is filed by the assessee against the order of learned Commissioner of Income-Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi dated 17.10.2022 for the assessment year 2017-18 in sustaining the addition of Rs. 28,25,000 under Section 68 of the Income-Tax Act,1961 on account of cash deposits during the demonetization period. 2. Brief facts are that the assessee is an individual engaged in the business of retail trading of jewellery, filed the return of income on 31.03.2018 declaring income of Rs. 11,44,200. 3. In the course of assessment proceedings, the Assessing Officer required the assessee to explain the source of cash deposits made into bank account during demonetization period. The assessee furnished the requisite details/documents on 16.10.2019 as called for by the Assessing Officer. The Assessing Officer on analyzing the cash sales during the assessment year 2016-17 and during the current assessment year i.e. 2017-18 was of the view that the cash sales made during the current assessment year were abnormally high while compared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g cash sales especially when there is no discrepancy pointed out in the books of account. The learned counsel strongly placed reliance on the decision of the Mumbai Bench of the Tribunal in the case of ACIT vs. M/s. Ram Lal Jewellers Pvt. Ltd. in ITA No.1600/Mum/2023 dated 26.07.2023. Referring to the decision, learned counsel submits that on identical facts, Mumbai Bench of the Tribunal deleted the addition made on account of cash deposits on the ground that if the parties during the period of demonetization has purchased huge quantity of jewelry and cash which has been duly recorded in the books of account of the assessee and also tallying with the quantity of stock then simply because there was a huge cash sales in the particular month, cannot be a reason for trading the cash sales as undisclosed income. Reliance was also placed on the decision of the Co- ordinate Benches in the case of DCIT vs. Bala Jewelers Ltd. in ITA No.352/Del/2021 dated 09.06.2023 and also the decision of the Delhi High Court in the case of PCIT vs Agson Global Pvt. Ltd. 441 ITR 550. 6. On the other hand, learned Departmental Representative strongly supported the orders of the authorities below. 7. Heard r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is purchase of Rs. 6,00,000/- in 01st Qtr in the revised return no purchase was there. Quarter-II Rs. 1796793 Rs.17,96,793/- There is no reason for revision in the 02nd Qtr. Sales and purchases are same. Quarter-III Rs. 31,69,674/- Rs. 36,88,824/- Few bills of sales were not taken in the original return Copy of the VAT return for the F.Y. 2016-17 in original as well as revised return enclosed. 9. It is observed that inspite of the assessee furnishing the cash book month-wise cash sales, purchase, month-wise stock giving opening stock purchases and sales in each month along with detailed statement of accounts, the Assessing Officer did not point out any defects in the books of accounts and the information furnished. The only apprehension of the Assessing Officer in treating the cash deposits as undisclosed was abnormal increase in cash sales made during the year and with comparison to the cash sales made by the assessee in the previous assessment year. The analysis made by the Assessing Officer that the cash sales corresponding to the period from April 2016 till 08.11.2016 were more than the cash sales during the period from 01.04.2015 to 08.11.2015 is the only basis for disbelievi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led cash compliance report with respect to cash sales in Form 61A giving all the details with respect to cash sales. Nowhere, the ld. AO has pointed out that assessee did not have sufficient stocks in its possession or otherwise found any defect in the stock register. If that finding has not been given and no discrepancy has been pointed out, then how the corresponding sales of same stock and quantity can be treated as undisclosed income of the assessee. Once, AO has accepted the sales and there is direct nexus with the closing stock and the sales along with movement of stock linked to purchases then such credit on account of sales cannot be added u/s. 68. If the cash sales have been accepted, then deposit of the same cash in the bank account which is tallying with the entries in regular cash book, cannot be treated as deposits made out of any undisclosed income. 14. Addition u/s. 68 on account of cash deposits cannot be made simply on the reason that during the demonetization period, cash deposits vis-a-vis cash sales ratio is higher. If the parties during the period of demonetization has purchased huge quantity of jewellery on cash which has been duly recorded in the books of acc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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