9911796707
TMI Blog2024 (10) TMI 1638X X X X Extracts X X X X X X X X Extracts X X X X ..... ies to assessee which forced them to accept in order to maintain a smooth working capital cycle. Assessee also enquired with their bankers regarding the same, who in turn advised that they will be accepting payments up to 30th December, 2016. Based on this, assessee was under the bonafide belief that acceptance of cash in demonetised form from identifiable customers is permitted and therefore assessee were accepting from such customers for a few days. As soon as assessee came to know that only specified persons can accept demonetised currency they stopped receiving the same. The amount received during the initial few days were remitted to the bank account. This was the reason for acceptance of the demonetized currency from their customers, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, for the assessment year 2017-18 u/s.143(3) of the Income Tax Act, 1961 (hereinafter the 'Act'), vide order dated 28.12.2019. 2. The only issue in this appeal of assessee is as regards to the order of CIT(A) confirming the action of ld. Assessing Officer in making addition of cash deposits of Rs. 70,68,500/- as unexplained money u/s.69A of the Act being cash deposited in bank during demonetization period in Specified Bank Notes (SBNs). 3. Brief facts of the case are that assessee is engaged in selling of fast moving consumer goods by taking distribution of M/s. Hindustan Unilever Limited, M/s Britannia Industries Ltd, M/s. Kalleesuwari Refinery Private Limited etc. Assessee case was selected for scrutiny under CASS to verify large cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account during demonetisation period since the old SBN are no longer a legal tender w.e.f. 09.11.2016. 4 The assessee has also referred The Gazette of India, Extraordinary PART-II Section 1 issued by Ministry of Law and Justice under The Specified Bank Notes (Cessation of Liabilities) Act, 2017 dt. 28th February, 2017 which states that the prohibition on holding, transferring or receiving specified bank notes shall be prohibited with effect from appointed day i.e 31.12.2016 as per para 5 of the Gazette. By quoting this Gazette, the assessee firm claimed that the acceptance of old currency i.e SBN during demonetisation was not prohibited till 30.12.2016''. Aggrieved assessee preferred an appeal before the ld. CIT(A). 4 The ld. CIT(A) als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there was a scarcity of Quid cash in non-demonetised currencies. Smaller traders had to accept payments from their customers in demonetised and non-demonetised currencies as well because of the fact that non acceptance will lead to fall in sales and put their customers into hardship. The traders in turn started making payments in demonetised currencies to assessee which forced them to accept in order to maintain a smooth working capital cycle. Assessee also enquired with their bankers regarding the same, who in turn advised that they will be accepting payments up to 30th December, 2016. Based on this, assessee was under the bonafide belief that acceptance of cash in demonetised form from identifiable customers is permitted and therefore as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithdrawn from circulation from 09.11.2016 onwards. The Government of India and RBI has issued various notifications and SOP to deal with specified bank notes. Further, the RBI allowed certain category of persons to accept and to deal with specified bank notes up to 31.12.2016. Further, the specified bank notes (cessation of liability) Act, 2017, also stated that from the appointed date no person can receive or accept and transact specified bank notes, and appointed date has been stated as 31.12.2016. Therefore, there is no clarity on how to deal with demonetized currency from the date of demonetization and up to 31.12.2016. Therefore, under those circumstances, some persons continued to accept and transact the specified bank notes and depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luding the cash received in demonetized currency and cash deposits, there is negligible amount in demonetized currency. Therefore, we are of the considered view that when there is no significant change in cash deposits during demonetization period, then merely for the reason that the assessee has accepted specified bank notes in violation of circular/notification issued by Government of India and RBI, the source explained for cash deposits cannot be rejected. Simpliciter violation of certain notification issued by RBI or demonetization scheme announced by Government of India on 08.11.2016 will not entitle the Revenue to make addition u/s.69 or 69A of the Act. Because, the mandate of the provisions of Section 69 & 69A of the Act, i.e., unexp ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
