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

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.

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

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,

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:-

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

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