SUSHIL KUMAR CHOUDHARY,SIWAN vs. DC/ACIT CIRCLE-3, DARBHANGA

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ITA 269/PAT/2023Status: DisposedITAT Patna27 November 2024AY 2017-184 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the assessee had substantial cash sales over the years, supported by VAT returns, cash books, and audited accounts. Therefore, the cash deposits were considered sourced from these sales.

What were the facts?

The assessee, a dealer of FMCG products, deposited ₹32,21,000 in old currency notes during the demonetization period. The Assessing Officer (AO) treated this as unexplained money and made an addition to the total income.

What were the issues?

Whether cash deposits made during the demonetization period, which were treated as unexplained by the AO, could be substantiated by the assessee's past sales and financial records.

Which sections of the Income-tax Act were involved?

Section 69,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “DB” BENCH, PATNA

Hearing: 13.11.2024Pronounced: 27.11.2024

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 13.07.2023 for the AY 2017-18.

2.

The only issue in the grounds of appeal is against the confirmation of addition of ₹32,21,000/- by CIT (A) as made by the ld. AO on account of unexplained money being cash deposited during demonetization period.

3.

The facts in brief are that the assessee is a dealer of products of Hindustan Uniliver Ltd a FMGC products manufacturing company and

4.

The ld. CIT (A) also confirmed the finding made by the AO in the assessment order for the same reason that the assessee has not produced any evidences before the ld. AO in the form of cash book,

5.

After hearing the rival contentions and perusing the material available on record, we find that the assessee is a dealer in Biscuit, Horlicks, Medicine, Refine and other Products of Hindustan Unilever Ltd a FMGC company and has a huge turnover during the financial year of ₹32,04,00,269/-. The total purchases during the financial year were 27,87,55,187/-. We further observe that the cash sales during the year were ₹22,85,46,193/-. We have also examined the comparative sales of the assessee in the preceding two years, which is also been dealt with by the ld. AO in page 6 of the assessment order and is extracted below:-

Particulars From 01.04.2014 to From 01.04.2015 From 01.04.2016 to 0.11.2014 to 08.11.2015 08.11.2016 Total purchases 27,87,55,187 2,25,30,909 22,69,57,415 Total Sales 28,82,7,195 22,52,95,715 32,04,00,269 Cash Sale 27,20,87,376 22,45,65,020 22,83,46,193 Other than Cash sale - - - Any other cash receipt 6,42,207 22,398 16,423

6.

Thus it is abundantly clear from the above table that assessee has sufficient sources available with him to source the cash deposits into the bank account. We note that the scheme of demonetization was announced on 8 November 2016.We have examined the copy of VAT returns, cash books, ledger and annual return in form RT 3. We also examined the copies of the balance sheet, profit and loss account, audited balance sheet long with annexures and find that the details referred to above were in complete agreement with the said audited accounts. Therefore, based on the above said history of the assessee, we are of the considered view that the assessee has a huge cash sale

7.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 27.11.2024.

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