9911796707
TMI Blog2024 (8) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... not inspire any confidence. The assessee has done nothing to dispel the perception of the Revenue towards propriety of source of deposits. In the same breath however, it is difficult to assign a particular degree or standard of proof to establish the holding of cash in a conclusive manner with precision. The assessment towards source of cash deposits involves a process of evaluation of facts which involves guess and estimation. It is difficult to test the reliability of explanation towards cash deposit to the hilt in the circumstances existing in the case. We, thus, in fitness of things, would consider it appropriate to grant some benefit of doubt to the assessee. The possibilities of part of cases deposits out of cash withdrawals in the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. A comparative chart was referred from Assessment Years 2014-15 to 2017-18 in this regard. It was submitted that the average cash sales comes to around 35.75% of the total sale of all the four years. The assessee is covered by presumptive taxation scheme and filed return of income as per provisions of Section 44AD of the Act. No books of accounts are mandatory to be maintained under presumptive taxation except to declare Gross sales, Sundry Creditors and closing stock as on 31.03.2017 which was duly declared in the return of income. The assessee deposited Rs. 65,00,000/- during demonetisation of currency of Rs. 500/- and Rs. 1000/- notes, Rs. 35,00,000/- was deposited on 15.11.2016 and Rs. 30,00,000/- was deposited on 12.11.2016. 4. The l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,83,771/- 3. Cash withdrawal - Rs. 12,00,000/- 4.3.1 Regarding opening cash balance of Rs. 13,81,187/- the assessee has produced purported cash book showing cash balance of Rs. 13,81,187/- as on 01.04.2016. The content of cash book was disbelieved by the AO. In this regard assessee relied on VAT returns being filed by him before demonetization was announced. But I failed to understand how VAT returns can support contention of having cash in hand. The Income Tax return for A.Y.2016-17 was filed much after demonetization. The purported cash book supplied to the AO had no supporting evidences at all. The AO stated that a sum of Rs. 7,00,000/- was withdrawn on 31.03.2016. The AO has assumed that other than Rs. 7,00,000/-, assessee did not have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arding cash deposited out of purported cash sales, the assessee has presented a totally unrealistic picture of cash sales during the year. The AO had demonstrated in the assessment order how the cash sales were inflated. The cash sale shown was totally out of proportion as compared to immediate preceding years as well as the month preceding October, 2016. There was cash sale of Rs. 3,85,000/- from 01.04.2016 to 30.09.2016. The alleged cash sale figure jumped to Rs. 34,98,771/- for the period 1.10.2016 to 8.11.2016. The figure presented by assessee appeared to be more in the nature of make-belief-statement. It is also strange that almost all the purported case sales preceding the period, of demonetization was still available for deposit duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) has based its finding on nuanced analysis of pattern of withdrawals in earlier year. 9. The AO has further rejected the claim of the assessee that a sum of Rs. 17,00,000/- to be out of aggregate cash withdrawals in the month of June, September and October, 2016. The CIT(A) partially accepted the explanation of deposits out of September, October withdrawals but however, declined to admit the source of deposits of Rs. 8,00,000/- out of June, 2016 withdrawal owing to length of time of holding large amounts and possible utilization thereof for business and other needs. The CIT(A) also analyzed the plea towards cash deposit to be out of cash sales during the year but held that such explanation towards source is make belief explanation on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the holding of cash in a conclusive manner with precision. The assessment towards source of cash deposits involves a process of evaluation of facts which involves guess and estimation. It is difficult to test the reliability of explanation towards cash deposit to the hilt in the circumstances existing in the case. 11. We, thus, in fitness of things, would consider it appropriate to grant some benefit of doubt to the assessee. The possibilities of part of cases deposits out of cash withdrawals in the past and cash sales during the year cannot be wholly ruled out. In the balance of things, we consider it appropriate to grant partial relief to the extent of Rs. 25,00,000/- over and above the relief granted by the CIT(A). The First Appellate or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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