9911796707
TMI Blog2025 (3) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... t. In the instant case, the assessee successfully demonstrated that it is carrying out regular business activity, making regular sales both through cash and credit and that the alleged deposit is out of the cash balances available with the assessee in its books of account and therefore find merit in the contention of assessee. This view is further fortified in the case of Vasant and Company [2024 (10) TMI 1638 - ITAT CHENNAI] wherein held source of deposits has not been disputed and has been created out of ordinary business sales which has been credited into books of accounts and profits has also been duly included in the return of income filed in relevant assessment year. Therefore, we are of the considered view that, additions cannot be made u/s. 69 of the Act and taxed u/s. 115BBE of the Act towards cash deposits made to bank account of demonetized cash in SBNs'
The impugned addition made u/s. 68 of the Act is directed to deleted and the action of the AO invoking provisions of section 115BBE is also set-aside. Effective Grounds of Appeal raised by the assessee on merits are allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act and also invoked provisions of section 115BBE of the Act. 5. Aggrieved assessee preferred appeal before the ld.CIT(A) and inspite of furnishing the requisite details failed to succeed. Now the assessee is in appeal before the Tribunal assailing the impugned order. 6. Ld. Counsel for the assessee on the strength of financial statements and placing reliance on the decision of Coordinate Bench in the case of Vasant & Company in ITA No.351/Chny/2024, dated 09.10.2024 submitted that the assessee is a partnership firm regularly carrying out its business activity. The assessee is registered with the VAT department regularly filing the returns, quarterly returns incorporating cash sales which have given rise to alleged cash deposit are also part of the gross sales. He also submitted that at the time of demonetization period lot of customers gave cash against the outstanding debtors as well cash sales took place and therefore neither addition u/s. 68 of the Act is called for nor section 115BBE can be invoked. 7. On the other hand, ld. Departmental Representative vehemently argued supporting the orders of the lower authorities. 8. I have heard the rival contentions and perused the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Vasant and Company (supra) wherealso similar issue came up for adjudication and was decided by this Tribunal observing as follows : "5. We have heard the rival contentions and perused the material on record. The assessee before us explained that they are in the business of distribution of FMCG products and are the authorised distributor for M/s. Hindustan Unilever Limited, M/s. Britannia Industries Ltd and M/s. Kalleesuwari Refinery Private Limited etc. They purchase in wholesale from the manufacturers and sell them to retail outlets spread over their area of operation. Payments are collected from them either on the same day of sales are in due course. Irrespective of their collection, assessee has to make payments to our suppliers. The Turnover of the assessee for the last three years are as under: Financial year 2014-15 43.44 crores Financial year 2015-16 48.17 crores Financial year 2016-17 57.93 crores Assessee is constantly maintaining an average sale of 4 to 5 crores per month and there gross profit ratio is very low and there from they will not be able to extend much of credit to their customers as the same will eat out on our Return on Investments. Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee cannot accept specified bank notes after demonetization and the explanation offered by the assessee cannot be accepted. No doubt specified bank notes of Rs. 500 & Rs. 1000 have been withdrawn 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 deposited into bank accounts. Therefore, merely for the reason that there is a violation of certain notifications/GO issued by the Government in transacting with specified bank notes, the genuine explanation offered by the assessee towards source for cash deposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r any source of income and the assessee offers no explanation about the nature and source of such expenditure or acquisition of such money, etc., or the explanation offered by him, in the opinion of AO is not satisfactory. For violation of any RBI notification, etc., can have any civil or criminal liability and can be dealt with under any other provision of law by the concerned authority but for the purpose of bringing the amount under Income-tax, the provisions are very clear i.e., 69 & 69A of the Act. In our considered view, to bring any amount u/s. 69 or 69A of the Act, the nature and source of investment, needs to be examined. In case the assessee explains the nature and source of investment, then the question of making addition towards unexplained investment u/s. 69 of the Act does not arise. In this case, the source of deposits has not been disputed and has been created out of ordinary business sales which has been credited into books of accounts and profits has also been duly included in the return of income filed in relevant assessment year. Therefore, we are of the considered view that, additions cannot be made u/s. 69 of the Act and taxed u/s. 115BBE of the Act towards ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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