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TMI Blog2025 (3) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... out any defects in the books of account, no discrepancies were found in the stocks, sales and purchases and simply the AO concluded that there are huge deposits in the bank account during demonetization period and assessee amply demonstrated with the evidences that the cash sales and the cash deposits during relevant FYs were almost same and there was only a minimal increase in cash deposits during the FY 2016-17 relevant to A.Y. 2017-18. The addition could not be made.
Appeal of the assessee is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ng demonetization period as compared to average rate of cash source of Cash deposited during Demonetization Period. Accordingly notice u/s 143(2) of the I.T. Act was issued on 16.08.2018 and 28.09.2018 and served upon assessee at his e-mail address available in ITBA portal. 3.1 The assessee in his reply letter dated 05.11.2019 has submitted that the assessee is engaged in trading in the business of Sales Purchase of Computer and Computer Parts. The 3CB and 3CD Report dated 05.10.2017 audited by Shri Vivek Gupta filed by the assessee through his e-filing account is available on record. Other submissions filed online by the assessee vide letter dated 05.11.2019 08.11.2019.13.11.2019. 15.11.2019. 16.11.2019, 12.12.2019. 16.12.2019 and 23.12.2019 through his e-filing account are placed on record. 4. The Ld. AR submitted that the Ld. CIT(A) erroneously confirmed the addition of Rs. 27,21,110/- made by the Ld. AO on account of cash deposit in the bank account treating the same as unexplained invoking section 68 r/w section 115BBE of the Income Tax Act, and while doing so, the Ld. CIT(A) rejected the detailed submissions and explanation along with the evidences brought on record by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o deposit the entire quantum of cash held on a single day as the same involved travelling with the huge sum of cash. The appellant in this regard has also highlighted that that 10 th of November, 2016 was the first working day after the announcement of demonetization on 08.11.2016 on which the banks started accepting the deposits of demonetized currency notes from general public and cash was deposited within four working days of demonetization. The act of depositing demonetized currency within four working days appears to be prudent behavior on the part of the appellant. Further I find force in the submission of the appellant with respect to deposit of demonetized currency in more than one transaction taking into consideration security concerns and risk involved in carrying big amounts of cash. As regards the observations of the AO with respect to the quantitative details of mobile phones not appearing in the quantitative details reported in the 3CD, it is noticed that in Form 3CD the goods traded are reported under major heads monitors, CVT/UPS/SMPS, computer card, drives, others, inverter and battery. The appellant in this regard has referred to the detailed item wise stock summa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 50,78,890/-made in the months of July, August and September 2016 is not in doubt and accordingly there is no reason to question the cash deposits to the extent of Rs. 50,78,890/- made out of the said available cash balance pertaining to these sales. Further, the observation of the AO with respect to the high cash sales made in the month of October, 2016 which is amounting to Rs. 32,12,155/- is based on incorrect analysis of the facts. In this regard, the AO has analyze that the sale for the month of October, 2016 of Rs. 2,53,58,721/- has increased to 275% in comparison to the preceding year sales of the same month i.e. October, 2015. On perusal of the facts of the case that in this regard it is noticed that the said figures of sales mentioned by the AO in the assessment order is of total sales i.e. credit sales cash sales. The cash component in the said sales is Rs. 32,12,155/-, which is only in doubt and the remaining portion of credit sales is otherwise not in doubt. As regards the cash sales, there is no specific adverse remark of the AO in the assessment order, however the apprehension of the AO that the appellant must have made manipulation of said sales in its books of acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchase summary for FY 2015-16 (PB Page no. 453) 17) Copy of detailed chart showing month wise sales and purchase summary for FY 2016-17 (PB Page no. 453) 18) Copy of confirmation of debtors and creditors regarding their balances (PB Page no. 455-481) 19) Detailed chart showing both cash and credits sales from July 2016 to December 2016 (PB Page no. 487-488) 20) Item/Quantity wise stock summary (PB Page no. 490-496) 21) Details of sundry creditors (PB Page no. 497) 22) Copy of acknowledgement of VAT returns reflecting the sales made for AY 2017-18 (PB Page no. 498-501) 9. The Ld. AR submitted that the assessee maintained proper book of account which are being subjected to audited and has been regularly filed income tax return and he has made cash deposit of Rs. 86 lakhs during F.Y. 2016-17 relevant to A.Y. 2017-18 and having cash balance of Rs. 88,53,084/- as on 08.11.2016 and details of the sales in each of four months are as under: S. No Months Cash Sales (IN Ruppes) 1 July 2016 17,37,180/- 2 August 2016 16,36,160/- 3 September 2016 17,05,550/- 4 October 2016 31,12,155/- 10. There is material substance in the submissions advanced on behalf of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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