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Facts
The assessee, a liquor dealer, deposited Rs.5,98,216 in demonetized currency. The Assessing Officer treated this as unexplained income, contending that the assessee's cash book lacked sufficient funds. The assessee argued the deposit originated from sales.
Held
The Tribunal, upon reviewing the assessee's bank account, sales records, and cash deposit details, determined that the assessee possessed adequate funds. It was held that the deposit was indeed made from sales and was reflected in the cash book, leading to the deletion of the addition made by the Assessing Officer and confirmed by the CIT(A).
Key Issues
Whether the deposit of demonetized currency by a liquor dealer, claimed to be from sales and substantiated by cash book entries, could be validly treated as unexplained income by the revenue authorities.
Sections Cited
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Income Tax Appellate Tribunal, “SMC” BENCH KOLKATA
Before: SHRI GEORGE MATHAN
O R D E R This is an appeal filed by the assessee against the order passed by the ld. Addl/JCIT(A), Kochi, dated 20.03.2025 for the assessment year 2017-2018.
Shri S.K.Tulsian & Ms. Mita Rizabi, ld. ARs appeared on behalf of the assessee and Shri Somnath Das Biswas, ld. Sr. DR appeared on behalf of the revenue.
It was the submission of the ld.AR that the assessee is a dealer of liquor. It was the submission that the assessee has deposited Rs.5,98,216/- in the form of demonetized currency on 13.12.2019 in United Bank of India. It was the submission that the said money was out of the sales of the assessee. It was the submission that the Assessing Officer held that there were no sufficient funds available in the cash book of the assessee and had treated the said amount of Rs.5,98,216/- as unexplained income of the assessee. It was the submission that the cash book of the assessee and the cash deposit slips clearly shows that for the assessment year 2017- 2018 in November, 2016 the assessee had sales of Rs.65,02,484/- and the cash deposited was Rs.35,61,900/-. This is evident from the break up of the cash book as has been produced at page 11 of the paper book which reads as follows :-
It was the submission that the assessee had sales during the relevant period and its deposits are out of the sales, hence, no addition would call for.
5. In reply, ld. Sr. DR vehemently supported the orders of the ld. Assessing Officer and ld. CIT(A).
I have considered the rival submissions. A perusal of the bank account of the assessee, sales and cash deposits as has been reflected in page 11 of the paper book clearly shows that the assessee had adequate funds for making the said deposit in the bank account. As the assessee has made deposit out of its sales and its cash book, therefore, no addition is called for. This being so, the addition as made by the Assessing Officer and confirmed by the ld.CIT(A) stands deleted.