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TMI Blog2023 (2) TMI 1353X X X X Extracts X X X X X X X X Extracts X X X X ..... t - Once the SBNs ceased to be a legal tender, the assessee is not expected to violate the same and later on allowed to come up with an explanation that the cash receipts were evidenced by entries in the books of accounts maintained by the assessee. We are unable to accept the proposition of Ld. AR that such an addition could not be made under Income tax Act. On the given facts of the case, a presumption would go against the assessee that it has routed its own unaccounted money in the garb of cash sales and receipts from sundry debtors. No common man would be accepted to accept the prohibited currency and credit the same in its books of accounts which has otherwise lost its value. Therefore, the conclusion that the impugned amount was nothi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduced to the Assessing officer and they have not objected the veracity of debtors. Once the debtor is ready to give the outstanding amount, the assessee could not avoid them, as it will be loss for the assessee. Hence, the assessee received the amount from debtors and deposited in to bank and there is no hiding of facts or unexplained money. The order of the Assessing Officer is erroneous in law and against the principles of natural justice. The addition so made requires deletion, for the said sum, since duly reflected in the books of account of the appellant, is outside the scope of sec. 69A/68 of the Act, for the said section is applicable only when the sum is found NOT recorded in the books of accounts maintained by the appellant. Henc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collection during the demonetization period by way of cash sales and collection from sundry debtors was at Rs. 30.59 Lacs which was sourced to deposit the impugned cash into Corporation Bank. 4.3 However, Ld. AO found that out of deposit of Rs. 22.45 Lacs, a sum of Rs. 14.91 Lacs was deposited in Specified Bank Notes (SBN) currency i.e., Rs. 500/- and Rs. 1000/- notes which ceased to be legal tender after 08-11-2016. The assessee submitted that a sum of Rs. 10.91 Lacs stood as closing cash balance as on 08.11.2016 which was evident from cash ledger. Accepting the same, the balance amount of Rs. 3.95 Lacs stated to be sourced out of cash sales as well as collection from sundry debtors post 08.11.2016 was held to be not acceptable since the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notes could not be used for transacting business and/or store of value for usage from 09.11.2016 onwards. Thus, it was very clear that once it was declared in Gazette by the RBI that Specified Bank Notes cease to be legal tender, no person is allowed to use such SBN notes for transacting normal business activities or allowed to store for future usage. Another finding was that post 09.11.2016, SBNs was just a piece of paper and they bear no value. Therefore, it could not be measured in money terms and hence, it could not be journalized in books of account. The transactions made in SBN on or after 09.11.2016 could not be entered into cash books. Therefore, the credit of the same in the books of accounts was not valid. Accordingly, both the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued by the Government of India, yet no additions could be made under Income Tax Act since the money was sourced out of cash sales and collection from sundry debtors. However, the facts of the case as well as the plea of Ld. AR do not convince us, in any manner. The assessee, despite being aware of the fact that the SBNs ceased to be valid legal tender, stated to have accepted the same and squared-off the stock and debtors in the books of accounts. The Hon ble Supreme Court in the case of Apex Laboratories (P.) Ltd. vs. DCIT (135 Taxmann.com 286) has held that one arm of the law cannot be utilized to defeat the other arm of law and doing so would be opposed to public policy and bring the law into ridicule. It was further held that no court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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