9911796707
TMI Blog2025 (3) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... o additions (i) made by the AO u/s.69A of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') as unexplained money during demonetization period of Rs. 61,17,000/- and (ii) disallowance of reimbursement expenditure of Rs. 1,07,24,039/-. 3. The brief facts are that the assessee company filed its return of income (RoI) for AY 2017-18 on 17.10.2017 disclosing an income of Rs. 51,25,840/- and book profit of Rs. 30,36,820/- u/s.115JB of the Act. Subsequently, the return was selected for scrutiny and the AO noted that assessee had deposited cash to the tune of Rs. 61,17,000/- in Specified Bank Notes (SBNs) during demonetization period between 09.11.2016 and 30.12.2016. When asked by the AO to explain the nature and source of cash depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee reimburses to them. In order to meet these expenses, the assessee therefore had to withdraw regularly cash and brought to our notice that the operational expenses of the assessee in the earlier year i.e. AY 2016-17 was to the tune of Rs. 12,86,13,236/- when the Revenue from operation was Rs. 19,01,61,675/- and Gross Profit (GP) was Rs. 6,15,48,431/- i.e. GP was 32.37% and Net Profit (NP) was Rs. 2,97,68,217/- viz. 5.14% and in the earlier year to it i.e. AY 2015-16 operational expenses was more than Rs. 24 Crs. and Net Profit was 2.64%; and in the year under consideration, it was only Rs. 4.56 Crs. where assessee had shown GP of 49.65% & NP of 3.35%. Therefore, the assessee taking note of the operational expenses incurred in the earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... small amount can't be faulted with, when assessee had shown to have the cash in hand which was withdrawn by the assessee from its own bank account. Moreover, we don't countenance the AO's action of cherry picking few cash withdrawals and suspecting them for not spending the same, can't be reasonable ground on which the AO could draw adverse inference against the assessee. We note that the AO accepted the assessee's assertion that it has withdrawn an amount of Rs. 98,82,599/- during the year before the demonetization was declared and assessee had sufficient cash balance to cover the SBNs deposited during demonetization period. In such a scenario, without the AO able to disprove the explanation of the assessee or contradict the assessee's cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than logistic services, the assessee being a Customs House Agent (CMA) [license holder to clear cargo all over the country] had to incur expenses for clearing activities as well as for travel & food expenses, etc., for the employees. And the Ld.CIT(A) took note of the fact that one of the employees of the assessee had to travel to Indonesia to meet the clients and therefore, the assessee had to reimburse the travel & other expenses incurred by such employee and filed details of such expenses reimbursed to the tune of Rs. 33,15,975/- as well as the expenses incurred by the employees for clearance of cargo, etc., being a Customs House Agent to the tune of Rs. 74,08,064/-. The Ld.CIT(A) after taking note of the relevant materials/ledger extra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO without pointing out any infirmity in the entries made in the ledger extracts. It is further noted that the assessee's accounts are audited and the assessee has produced all the books before the AO which has not been rejected. The Ld.AR invited our attention to a chart which shows that the assessee in the year under consideration has shown GP of 49.65% and if the disallowance of Rs. 1,07,24,039/- is made, then GP would shoot up to 61%; and in this regard, it is noted that in earlier years assessee's GP was 32.37% & 19.42% and in the subsequent years 47.36%. Hence, considering the overall facts and circumstance of the issue, we find no infirmity in the action of the Ld.CIT(A) allowing the expenses claimed to the tune of Rs. 1,07,24,03 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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