SHIV SHANKAR CARGO MOVERS PRIVATE LIMITED,NEW DELHI vs. ITO WARD 23(2), NEW DELHI

It was submitted by the Ld. Counsel appearing for the assessee that the amount was deposited out of the cash in hand; the deposit was made during the assessment year from the opening cash and cash in hand; deposits were made out of withdrawals on various dates which has not controverted by the Ld. AO.

Before us the entire set of documents were furnished including the payment received by the assessee from different parties and the bank statement showing withdrawals and deposits thereafter made by him. The Ld. AO added the impugned amount as unexplained cash credit under Section 68 of the Act in the absence of details of the persons from whom the appellant had received freight being furnished holding such case made out by the appellant an afterthought. Moreso, the Ld. CIT(A) was of the opinion that the assessee in Assessment Year 2016-17 deposited cash of Rs.87,80,740/-, Assessment Year 2017-18 Rs.148,79,840/-, subsequent Assessment Year 2018-19 of RS.70,53,697/-. Since, the year under consideration being demonetization year, the cash deposited by the assessee is much higher than that of the other two preceding year and succeeding year and the Ld. AO applying the test of human probability concluded that no prudent Shiv Shankar Cargo Movers Pvt. Ltd. (AY: 2017-18) businessman would withdraw cash when much cash is already in hand and therefore, finally confirmed the addition of Rs.29,95,000/- as made by the Ld. AO for want reliable explanation made by the assessee. It is noted that the month wise and date wise cash flow chart for the year particularly for the demonetization period from 9.11.2016 to 31.12.2016 as has been submitted being perused. The reconciliation statement is also been perused. The case made out by the assessee is this that the only source of cash received is freight and forwarding income; the cash proceeds from the freight income were duly credited in the profit and loss statement under the head ‘freight and forwarding income’ and offered to tax. In fact, the same cash proceeds were then deposited in the bank account. There is a direct correlation between the cash outflow in the cash ledger with the cash deposited in the bank account is found. When the cash deposited in post demonetization by the assessee was out of the cash sales has not been refuted by the Ld. AO then the cash deposit could not have been treated as undisclosed income of the assessee under the present facts and circumstances of the matter. Apart from the detailed statement of bank account of the assessee showing sufficient withdrawal and respective deposit thereafter estatablishes the source of impugned cash deposit. The Ld. Counsel appearing for the assessee relied upon the judgment passed by the Coordinate Bench in the case of Agsons Global Private Limited Vs. ACIT reported in (2021) 115 taxmann.com 342 wherein it has held that the additions cannot be made in the demonetization cases by the assessing authorities on the basis of deviation/variance in cash deposits and cash sales ratio of the demonetization with that of the earlier periods since the appellant had established the authenticity and genuineness of such cash sales; there cannot be a fixed sales pattern in any business. Suspicion however,

In that view of the matter in the absence of any contrary document in the hands of the revenue disproving the sales of the assessee the addition is found to be not sustainable and thus, deleted.

The appeal of the assessee is allowed.