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TMI Blog2025 (2) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... age, disallowance of 10% of cash generated during demonetization period would meet the ends of justice.
In the present case, there are cash deposits during demonetization period as well as remaining period of the year. Hence, we direct the AO to restrict the addition to 20% of the cash deposit to avoid possibility of revenue leakage and delete the remaining amount. Accordingly, this ground is partly allowed.
Levy of tax u/s 115BBE - AR has relied on various decisions which are placed in the paper book. We find that the Division Bench of this Tribunal in cases of Samir Shantilal Mehta [2023 (5) TMI 1279 - ITAT SURAT] Arjunsinh Harisinih Thakor [2023 (6) TMI 770 - ITAT SURAT], Jitendra Nemichand Gupta [2023 (6) TMI 1338 - ITAT SURAT] and Sanjaybhai Mansukhbhai Patel [2024 (8) TMI 1524 - ITAT SURAT] held that applicability of amended provision of Section 115BBE of the Act is not retrospective. There is no reason not to follow above decisions. Thus, the AO is directed to tax the addition at normal rate of tax and applicable surcharges and cess, if any. The the assessee is, accordingly, allowed relief against taxing the addition at higher rate u/s 115BE of the Act. X X X X Extracts X X X X X X X X Extracts X X X X ..... e the same with cogent reasons and documentary evidence. The AO also added Rs. 14,689/- being excess standard deduction claimed from income from house property. The total income was determined at Rs. 53,63,740/- against returned income of Rs. 17,84,250/-. 4. Aggrieved by the order of AO, the assessee filed appeal before the CIT(A). The grounds of appeal and submission of the appellant are extracted at pages 2 to 5 of the appellate order. The CIT(A) has also reproduced the assessment order at pages 5 to 13 of the appellate order. The findings of the CIT(A) are at pages 14 to 17 of the appellate order. The ld. AR submitted that there was huge cash on hand on 31.05.2016 for Rs. 31,33,548/-, which decreased and increased in the subsequent months from July, 2016 to October, 2016. The assessee had also deposited huge cash of Rs. 1,01,43,050/- in the bank account in Oct, 2016 before the demonetization period. The assessee had received cash of Rs. 46,42,878/- in the first week of November, 2016 due to high bookings in the pre-Diwali period. The CIT(A) observed that the burden was on the assessee to establish the source of cash deposits in order to fall outside the scope of unaccounted cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16 to October, 2016. The appellant had also deposited huge amount of Rs. 1,01,43,050/- in October, 2016 i.e., before the demonetization period. Hence, there is nothing unnatural in the monthly details of cash receipts / cash payment / cash deposit in the bank account. The ld. AR further submitted that appellant had received cash for Rs. 46,42,878/- on account of booking advance for travel and vacation in the first week of November, 2016 due to pre-Diwali period. The ld. AR submitted that the AO did not find anything otherwise in reference to chart of cash receipts and cash payments month to month from April, 2016 to 8th November, 2016. He also submitted that the AO has not rejected the book results and, therefore, no addition ought to be made merely on surmises and conjectures or mere by stating that there is no satisfactory explanation. The cash deposit in bank is in the range of Rs. 61,49,055/- in May, 2016 to Rs. 1,01,43,050/- in October, 2016. Hence, deposit of cash for Rs. 47,32,300/- (partly in new notes for Rs. 4,20,000/-) in the month of November/December, 2016 (09.11.2016 to 31.12.2016) is quite normal. 5.1 The ld. AR in the alternative, submitted that even if some part o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g demonetization period. We are not fully convinced about the argument of the ld. AR. The assessee is engaged in the business of travel agent and tour operator but he has deposited the SBN on different dates from 10.11.2016 to 12.11.2016 as tabulated at page 7 and 8 of the assessment order. If the assessee had the old SBN before demonetization period, he would have deposited the same on a single day and not on different dates. It is an undisputed fact that the assessee has not given details of the depositors of the impugned cash during demonetization period. He has not correlated the deposit with bookings of tickets/hotels etc. There is no one-to-one nexus between the depositors and the services provided by the assessee. Therefore, the argument of the ld. AR cannot be totally accepted. The Co-ordinate Bench of Surat in the case of Amrita Gems Pvt. Ltd. (supra) has held that to avoid possibility of revenue leakage, disallowance of 10% of cash generated during demonetization period would meet the ends of justice. In the present case, there are cash deposits during demonetization period as well as remaining period of the year. Hence, we direct the AO to restrict the addition to 20% of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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