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TMI Blog2024 (7) TMI 723X X X X Extracts X X X X X X X X Extracts X X X X ..... orresponding sale invoice, e-way bill and ledger account copies of the parties. From the details furnished by the assessee, it is undoubtedly clear that the source for cash deposits into the bank account during demonetization period is explained out of known source of income. CIT (A) had recorded a categorical finding that similar cash deposits were made even before the demonetization period and after demonetization period. From the analysis of the cash deposits during and after demonetization period, there is no abnormal increase or deviation in cash deposits during the demonetization period. Therefore, we are of the considered view that when the assessee has recorded cash receipts in the books of account out of realization from sundry debtors before the date of demonetization, then the AO ought not to have made the addition towards cash deposits u/s 69 only based on the theory of human probabilities, because when the evidences filed by the assessee are glaring at us, the theory of human probabilities alone will not be sufficient to take an adverse view on the assessee. Since the assessee has justified the source for cash deposits during the demonetization period with necessary ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the parties from whom cash was received. The assessee further contended that the Income Tax Officer (Inv. Unit) II Hyderabad has conducted an inquiry and submitted his report on 20.03.2017 in respect of cash deposits during demonetization period where the assessee has submitted all details including the details of parties from whom cash was received and also explained that out of total cash deposits of Rs. 1,59,25,800/-, sum of Rs. 1,11,80,500/- is in Specified Bank Notes(SBNs) and the balance cash deposit is in regular currency. The Assessing Officer however, was not convinced with the explanation furnished by the assessee and according to the Assessing Officer, although the appellant claims to have received cash from sundry debtors towards sale of goods but failed to produce necessary evidences including confirmation from the parties to prove its case. The Assessing Officer further observed that on perusal of a few debtors account available on record, it is noticed that in almost all the accounts cash was received during the period from 1.11.2016 to 7.11.2016, whereas the sales were made many months before the actual realization of the money. Therefore, opined that the arg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said cash deposits were made during demonetization period. Thus, directed the Assessing Officer to delete the addition made towards cash deposits u/s 69 of the I.T. Act, 1961. 5. The learned DR, Smt. Sheetal Sarin, Addl/Jt. CIT, submitted that the learned CIT (A) erred in deleting the addition made u/s 69A of the I.T. Act, 1961 with respect to cash deposits made during the demonetization period simply basing on the names and addresses of the parties, invoice copy, e-way bills. The learned DR further referring to the assessment order and reports submitted by the Income Tax Officer (Inv.) Hyderabad submitted that the assessee has not filed any details before the Assessing Officer except the list of parties from whom the cash was received. Although, the assessee claims to have submitted all the details before the ITO (Inv.) but on a perusal of the report submitted by the Income Tax Officer (Inv) it is very clear that the assessee has filed a statement of persons from whom cash was received. Further, the statement recorded from the Director of the Appellant Company where he has clearly admitted that no details has been filed to substantiate the argument and further agreed to submit the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... man probabilities. Otherwise, the Assessing Officer never disputed the fact that the assessee is maintaining a regular books of account and further cash received from various parties is accounted in the books of account of the assessee before the date of demonetization. Once the assessee claims that the source for cash deposits is out of realization of sale proceeds from sundry debtors, then the same cannot be brought to tax under the provisions of section 69 of the I.T. Act, 1961 for the simple reason that the provisions of section 69 is applicable in a situation where the assessee has made investment which are not recorded in the books of account, if any maintained by him for any source of income and the assessee offers no explanation of the nature and source of investment or the explanation offered by the assessee is not up to the satisfaction of the Assessing Officer. In the present case, the cash received from sundry debtors has been recorded in the books of account of the assessee and further the assessee has explained the nature and source of investment by filing necessary evidences including corresponding sale invoice, e-way bill and ledger account copies of the parties. Fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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