DEPUTY COMMISSIONER OF INCOME TAX, VADODARA vs. PIYUSH FULCHAND SHAH, VADODARA
Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH, AHMEDABAD
Before: DR. BRR KUMAR & Ms. SUCHITRA KAMBLEAssessment Year: 2017-18
PER SUCHITRA KAMBLE, JUDICIAL MEMBER:
This appeal is filed by the Revenue against order dated 20.03.2024, passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year
2017-18. 2. The Revenue has raised the following grounds of appeal:
“(i)
Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in deleting the addition of Rs.78,50,000/- made by the Assessing Officer being unexplained cash credit u/s.68 of the Act, without appreciating the fact the assessee has failed to submit evidence to establish source of cash claimed to have been out of cash sales prior to demonetisation ?
(ii)
Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in deleting the addition of Rs.78,50,000/- made by the Assessing Officer being unexplained cash credit u/s.68 of the Act,
Assessment Year: 2017-18
without appreciating the fact the assessee has failed to provide any justification for an abnormal jump in percentage of cash sales to unidentifiable persons immediately before demonetization?
(iii)
The appellant craves leaves to add, modify, amend or alter any grounds of appeal at the time of, or before, the hearing of appeal.
It is prayed that the order of the CITIA) on the above issues be set-side and that of the Assessing Officer be restored.”
The assessee filed his return of income for the Assessment Year (A.Y.) 2017- 18 on 04.11.2017 declaring total income at Rs.21,61,950/-. The assessee is running the Dealership of ITC Limited in the name and style of Kalyan Provision Stores. The assessee’s case was selected for scrutiny and notice under Section 143(2) of the Income Tax Act, 1961 was issued on 24.09.2018. Notices under Section 142(1) of the Act dated 09.09.2019, 02.12.2019 and 20.12.2019a were issued and served upon the assessee. As per the information available with the Income Tax Department and on perusal of the Bank statements in respect of Bank accounts maintained by the assessee, the Assessing Officer noticed that the assessee made cash deposits amounting to Rs.78,50,000/- in demonetised currency on 10.11.2016 in the Bank Account maintained with Punjab National Bank. During the course of assessment proceedings, the assessee furnished copy of Bank statement for the period of 01.04.2016 to 31.03.2017 in respect of Banak account maintained with Punjab National Bank wherein the details of cash deposits made during the year were mentioned. The assessee furnished copy of cash book for the period from 01.04.2016 to 31.03.2017, which shows that the assessee has cash in hand in respect of cash sales. The Assessing Officer observed that the assessee has shown cash sales of Rs.39,86,160/- on 07.11.2016 and Rs.14,12,950/- on 08.11.2016 i.e. immediately before the date on which the demonetisation was declared by the Reserve Bank of India. The assessee has shown huge cash sales immediately prior to the date of declaration for which no supporting evidence was furnished and, therefore, the Assessing Officer made addition of Rs.78,50,000/- under Section 68 being unexplained cash credit and added the same to the total income of the assessee for A.Y..2017-18 and the same was taxed under Section 158BEE of the Act @ 60%. Assessment Year: 2017-18 7. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee is a Dealer in respect of the FMCG products and is running Provision Stores which requires cash sales on day-to-day basis. The CIT(A) has categorically mentioned that in assessee’s case the cash deposit was made in a single day immediately after demonetisation i.e. 10.11.2016, but the Assessing Officer has not doubted the stock position or purchase of goods which have been made through banking channels. In fact, there was no attempts to inflate stock by introducing fictitious purchase were found in assessee’s case by the Assessing Officer. The cash deposited was not transferred to any outside entity other than for purchases or business transactions. Therefore, abnormal jump in percentage of cash sales to unidentifiable persons immediately before demonetisation is not suspicious in day-to-day activities of the assessee and, therefore, the CIT(A) has Assessment Year: 2017-18 PBN/*
Copies to:
(1)
The appellant
(2)
The respondent
(3)
CIT
(4)
CIT(A)
(5)
Departmental Representative
(6)
Guard File
By order