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TMI Blog2024 (7) TMI 1579X X X X Extracts X X X X X X X X Extracts X X X X ..... d cash books which would show that the aforesaid deposits have been sourced out of business receipts only. It could also be seen that the deposits so made by the assessee has been remitted to the principal supplier only. AR has placed on record month-wise cash book break-up which would show that major sales are in cash which are regularly deposited in the bank account and no abnormality could be noted in this pattern post demonetization announcement. On these facts, impugned additions could not be sustained. AO has not followed the prescribed standard operating procedure. AO has reduced merely the profit margins on sales while making impugned additions. The said working would assume that the purchases were also not genuine which was never t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res. Proceedings before lower authorities 3.1 During the course of assessment proceedings, it was noted that the assessee deposited Specified Bank Notes (SBNs) of Rs.127.46 Lacs during demonetization period. As on 08-11-2016, the assessee was having cash balance of Rs.36.81 Lacs. The assessee submitted that deposits were sourced out of cash sales and collection from debtors. However, Ld. AO held that the assessee accepted SBNs from customers / agents for sale of ITC products and from debtors despite the fact that the same ceased to be legal tender. Accordingly, the differential deposit of Rs.90.64 Lacs was to be treated as unexplained money u/s 69A. Consequently, Ld. AO reduced proportionate profit on such receipts and added the remaining a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e nature of assessee s business, it would collect cash from petty retailers, deposit the same in his bank account and thereafter remit the same to its principal supplier. The assessee has deposited cash of Rs.128.71 Lacs during demonetization period which has partly been accepted. The Ld. AO has made addition only for those deposits which are in SBNs. However, the fact would remain the same that those cash has been generated out of business activities only since the assessee do not have any other source of income. Such cash collections form part of books of account of the assessee. No defect has been pointed in the same. The assessee has furnished cash books which would show that the aforesaid deposits have been sourced out of business rece ..... X X X X Extracts X X X X X X X X Extracts X X X X
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