DCIT, CENTRAL CIRCLE 2, RAJKOT, RAJKOT vs VAIBHAV GINNING SPINNING MILL PVT. LTD., RAJKOT

Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT

Before: DR. ARJUN LAL SAINI & DR. DINESH MOHAN SINHA

Hearing: 26/02/2026Pronounced: 10/04/2026

आदेश /ORDER Per, Dr. A. L. Saini, AM:

Captioned appeal filed by the Revenue, pertaining to Assessment Year 2017-18, is directed against the order passed under section 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by the Commissioner of Income-tax (Appeals)-11, Ahmedabad (in short ‘Ld. CIT(A)’) dated 19.08.2024, which, in turn, arises out of an assessment order passed by the Assessing Officer (assessing officer) u/s.143(3) of the Act, dated 28.12.2019.

2017-18 DCIT vs. Vaibhav Ginning Spinning Mill Pvt. Ltd.

The grounds of appeal raised by the Revenue are as under: 1) "On the facts and in the circumstances of the case and in law the Ld.CIT(A) has erred in admitting the evidence filed during the appellate proceedings and in deleting the addition of Rs.9,75,50,000/- made u/s.69A r.w.s. 115BBE of the Income Tax Act on account of unexplained money being cash deposited in his bank account during the demonetization period, by holding that the same to be out of business receipts and cash-in-hand, not appreciating that no supporting details had been filed by the assessee during the assessment proceedings." 2) "The Revenue craves leave to add/alter/armed and/or substitute any or all of the grounds of appeal"

The relevant material facts, as culled out from the material on record, are as follows. The assessee is a closely held limited company and engaged in the business of manufacturing of cotton bales from raw cotton through ginning process and cotton yarn from cotton bales through spinning. It had e-filed its return of income (ITR) on 30.10.2017, declaring total income of Rs. 3,44,49,019/-, along with Audit Report in requisite form. Later on, the assessee company has e-filed revised ITR on 11.01.2019, without modifying its income declared in the Original ITR. The assessee’s case was selected for complete scrutiny through Computer Aided Scrutiny Selection on the basis of original income tax return (ITR). Therefore, a digitally signed notice u/s 143(2) of the Act, was issued on 09.08.2018. The case was again selected for Complete Scrutiny through Computer Aided Scrutiny Selection with more reasons. Both the notices were duly served upon the assessee- company through e-assessment system on e-mail, in E-Proceedings Facility through ITBA system. A notice u/s 142(1) of the I.T. Act was issued on 11.09 2019, wherein certain details were called for with request to submit the same on or before 18.09.2019. In response to the said notice nothing was heard from the assessee. The case was again selected for Complete Scrutiny through Computer Aided Scrutiny Selection on the basis of Revised ITR. Both the notices were duly served upon the assessee company through e-assessment system on e-mail in E-Proceedings Facility through ITBA system. Nothing was heard from the assessee in response to the Page 2 of 27 2017-18 DCIT vs. Vaibhav Ginning Spinning Mill Pvt. Ltd. any notices. One more opportunity was given to the assessee by issuing notice u/s 142(1) of the Act, on 08.11.2019, wherein it was informed that no further adjournment or extension of time will be granted as you had already enjoyed sufficient time.

In response to the above notices, the assessee has furnished partial submission dated 20.11.2019 in E-Proceedings Facility through its account in 'E -Filing website of the Income Tax Department. The submission of the assessee- company was duly considered by the assessing officer, vis-à-vis the reason for selection of the case and other relevant materials available on the record. One of the reasons for selection of case in scrutiny is Large value cash deposits during demonetization period reported and undisclosed income reported by PCIT (on ITBA AIMS Portal after on-line verification of cash deposit during demonetization). During the assessment proceedings, on perusal of the bank statement, the assessing officer noticed that the assesse had made cash deposits of Rs. 12,29,50,000/-, in its SBI A/c No. 31559184504. The assesse was requested to explain the source of these cash deposits. The assesse did not file any reply in response to the various notices. Finally a show cause notice was issued on 20.12.2019, and the assesse was asked to show cause as under:

"Further during demonetization period, you had deposited cash of Rs. 12,29,50,000/- in the account held with State Bank of India A/c NO 31559184504. In this regard you are asked to furnish requisite details in respect of explanation of source of the cash. Till date nothing has been heard from you. Therefore, you are hereby show caused as to why the same should not be added to the total income for the year under assessment year u/s 69A of the I.T. Act, 1961 being the unexplained cash."

However, assessing officer noted that except submitting a cash book on 26.12.2019, the assesse has not filed any explanation/narration to the entries recorded therein. Hence, assessing officer noted that it is clear that there is absolute non-cooperation on the part of the assessee in explaining the sources

Page 3 of 27 2017-18 DCIT vs. Vaibhav Ginning Spinning Mill Pvt. Ltd. of the cash. Therefore, the issue was being dealt on merits.Perusal of the cash book revealed that assessee was keeping huge cash on hand and still withdrawing cash in small proportions from the bank. The assessing officer also noted that the assessee is regularly withdrawing cash despite having huge cash on hand. The purpose for which these withdrawals are made, is not explained. The most plausible inference that can be drawn is that, the assessee did not have physical cash, and therefore it had to withdraw cash to meet its requirements. Therefore, it is clear that the cash deposited during demonetization period is nothing but the unaccounted cash of the assessee.It was further seen from the cash book, by the assessing officer that there are no payments going towards making URD purchases which is prominent feature of the ginning sectors as majority of the purchases of the such units are generally in URD purchases. It was also seen that, there is huge outstanding creditors, however, despite repeated requests, the assessee is not filing details of all such creditors. Further, it is also baffling to note that in spite of having such huge bank balances on various dates, rather than using them for payments towards trading liabilities, assessee- company has withdrawn cash on regular interval without any business use of such withdrawals.The assessee was requested to file details of purchases and sales along with quantitative details of stock. No details of the same were filed. This again casts doubt about the claim of genuineness of cash deposits.

The assessing officer further notice that the assessee is having CC loan facility on which it is paying huge interests. Under the circumstance, it is very prudent on the part of the person to reduce the loan and interest liability rather than keeping huge cash on hand. It was further seen from the cash book that the assessee is mostly utilizing the withdrawn cash to meet some factory building repairing work. On the other hand, there is a steady increase in the cash on hand, day after day, till the declaration of demonetization when, the entire cash

Page 4 of 27 2017-18 DCIT vs. Vaibhav Ginning Spinning Mill Pvt. Ltd. is deposited at various dates. Further, if it is cash on hand, the assessee would have put the entire cash in one go. Whereas, the cash was deposited on various dates. Thus it is clear that (a) the cash withdrawn was utilized for some other purpose (b) during the demonetization period, the assessee brought its unaccounted cash as there was opportunity in the form of cash in hand in the books and/or(c) the beneficiary of this cash is somebody else. The assessee is not coming forth to explain the above. Therefore, assessing officer did not have other alternative but to treat the cash as unexplained cash within the meaning of section 69A of the I .T. Act r.w.s. 115BBE of the I.T. Act.

The assessing officer further observed that since the assessee had made withdrawal of cash from its bank account, the entire cash cannot be treated as unexplained cash. Therefore, the cash withdrawal of one month was treated as explained cash. Therefore, the assessee is given benefit of Rs. 2,54,00,000/- which was withdrawn in the month of the October 2016. The remaining cash of Rs 9,75,50,000/- was treated by the assessing officer, as unexplained cash and added u/s. 69A r.w.s. 115BBE of the I.T. Act, 1961.

Aggrieved by the order of the assessing officer, the assessee carried the matter in appeal before the Ld. CIT(A) who has deleted the addition made by the assessing officer. The ld.CIT(A) noticed that assessing officer has not doubted purchase or sales or Gross profit or net profit as shown in audited annual accounts and in return of income. On perusal of paper book submitted by assessee, it is found that assessee has filed various submissions dated 20.11.2019, 20.12.2019, 25.12.2019, 26.12.2019 and 27.12.2019 on e-filing portal. It was observed by ld.CIT(A) that during the course of assessment proceedings, assessee has provided copy of cash book along with bank statements, vide letter dated 20.12.2019, which is not disputed by the assessing officer. On perusal of notice u/s 142(1) of the Act issued in assessment

Page 5 of 27 2017-18 DCIT vs. Vaibhav Ginning Spinning Mill Pvt. Ltd. proceedings, it was found by ld.CIT(A) that the assessing officer has not issued any specific details regarding URD purchases in cash, hence observation of the assessing officer that assessee has not made any URD purchase in cash even considering his peculiar business of cotton ginning is incorrect. On the contrary, the assessee had submitted complete cash book for year under consideration as well as earlier years from which it pointed out that URD purchases in cash is already made and reflected as part of purchase account in Profit & loss account. It was observed that issue in present appeal is not regarding whether assessee has made URD purchase or not but while making addition u/s 69A of the Act, the assessing officer has doubted availability of cash in absence of URD purchase. In present case, assessee had made URD purchase in cash and stated that assessee had made payments of Rs. 4,98,21,831/- during the period from 01.04.2016 to 08.11.2016. Considering these facts and circumstances, the ld.CIT(A) deleted the addition.

Aggrieved by the order of the Ld. CIT(A), the Revenue is in appeal before us.

10.

Learned DR for the Revenue, vehemently argued that cash was deposited by the assessee, during demonetization period to the tune of Rs.12,29,50,000/- , however, the assessing officer, considered the case withdrawn of one month Rs.2,54,00,000/- as explained cash, and the balance Rs.9,75,50,000/- ( Rs.12,29,50,000- Rs.2,54,00,000), was added in the hands of the assessee. The Ld. DR submitted that the assessee has not explained the huge cash balance in the cash book properly and there are huge creditors in the books of accounts. Therefore, the question arises that why the assessee is not paying to the creditors. The assessee is paying interest on loan and when the cash balance is available, the assessee need not to take such loan. Therefore, the cash deposited during demonetisation period has not been explained by the assessee with Page 6 of 27 2017-18 DCIT vs. Vaibhav Ginning Spinning Mill Pvt. Ltd. cogent evidences. Further, if it is cash on hand, the assessee would have put the entire cash in the bank account, in one go. Whereas, the cash was deposited on various dates, thus it is clear that the cash withdrawn was utilized for some other purpose and during the demonetization period, the assessee brought its unaccounted cash as there was opportunity in the form of cash in hand in the books, however, the beneficiary of this cash is somebody else. Therefore, learned DR contended and that addition made by the assessing officer should be upheld.

11.

The Ld. DR for the Revenue, also submitted that during the appellate proceedings, the Ld. CIT(A) has accepted the various additional evidences. The assessee has submitted a chart before the Ld. CIT(A), which was not available before the assessing officer, besides, assessee has submitted other additional evidences before the ld.CIT(A). Therefore, the assessee has submitted the additional evidences, hence, the matter may be restored back to the file of the assessing officer for fresh adjudication.

12.

On the other hand, Ld. Counsel for the assessee submitted that the assessee is engaged in purchasing raw cotton from the farmers and the raw cotton (i.e. kapas) purchased from the farmers is further processed by the assessee. The books of accounts of the assessee are audited and during the assessment proceedings, the assessee has submitted various submissions on six occasions before the assessing officer and submitted the cash book, bank book, audited financial statement, the cash deposited in the previous year and the cash deposited in the subsequent year were also submitted. The assessee is in the cash oriented industry, where the assessee received the cash and paid the cash to the farmers against the kapas purchased by the assessee. Therefore, out of Rs.12,29,50,000/-, of cash deposit, the assessing officer has doubted only Rs.9,75,50,000/-, which is deposited during demonetization period. The Ld.

Page 7 of 27 2017-18 DCIT vs. Vaibhav Ginning Spinning Mill Pvt. Ltd. Counsel submitted that there is a same pattern of cash deposit in the previous years as well as in the subsequent years. Therefore, cash was deposited, out of the amount withdrawn by the assessee and amount received from the customers, which should not be doubted.

13.The Ld. Counsel for the assessee further submitted that provisions of Section 69A of the Act, is not applicable to the assessee, under consideration as the entire cash was recorded in books of account. Therefore, the provisions of Section 69A of the Act is not applicable and hence, the addition made by the assessing officer u/s. 69A of the Act is not sustainable in the eye of law. The Ld. Counsel also stated that the audited books of accounts, list of debtors and creditors, cash book, bank book and the bank statement etc, were submitted before the assessing officer, and therefore no additional evidences were submitted before the ld.CIT(A), during the appellate proceedings.

14.

The Ld. Counsel for the assessee also submitted that assessee has not submitted any single additional evidence before the Ld. CIT(A). Whatever, the documents and evidences submitted before the assessing officer were also submitted before the Ld. CIT(A). The comparative chart of the cash deposit in three years is available in the cash book and bank book, which is already submitted before the assessing officer. Therefore, a comparative chart submitted by the assessee, before ld.CIT(A), with the help of cash book, bank book is not treated as an additional evidence. As all the figures of the comparative chart submitted before the Ld. CIT(A) is available before the assessing officer, hence, there is no additional evidence submitted by the assessee.

15.

We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the Page 8 of 27 2017-18 DCIT vs. Vaibhav Ginning Spinning Mill Pvt. Ltd. case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. Learned DR for the revenue submitted before us that assessee submitted additional evidences before the learned CIT(A) during the appellate proceedings. Therefore, matter may be remitted back to the file of the assessing officer for fresh adjudication, as it is violation of Rule 46A of the Income tax Rules. However, we note that whatever, the documents and evidences submitted before the assessing officer were also submitted before the Ld. CIT(A). The comparative chart of the cash deposit in three years is available in the cash book and bank book, which is already submitted before the assessing officer. Therefore, a comparative chart submitted by the assessee, before ld.CIT(A), which is prepared by the assessee, with the help of cash book, bank book is not treated as an additional evidence, because it is prepared with help of the Bank book and cashbook in easy to understand format, and since the Bank book and cash book were already before the assessing officer, therefore, such chart cannot be treated as an additional evidence. As all the figures of the said comparative chart submitted before the Ld. CIT(A) is available before the assessing officer, hence, there is no additional evidence submitted by the assessee, therefore, we reject the arguments advanced by the learned DR for the revenue.

16.We note that the assessee-company has situated in a Village where banking facilities are available at very remote place. Therefore, the assessee keeps the huge cash balance in hand. Since, the assessee makes the payment to the farmers in cash against the kapas purchased by it, therefore, it is necessary to maintain such cash balance. Whenever, the assessee needs further amount, the assessee used to withdraw the amount from the bank account. The cash balance and the audited books of accounts were submitted for three years and, hence, we find that in the previous year also the assessee has deposited the cash in the bank account and in the subsequent year also, the assessee has deposited cash

Page 9 of 27 2017-18 DCIT vs. Vaibhav Ginning Spinning Mill Pvt. Ltd. in the bank account. Such cash is received from its customers during the course of business, therefore, it is cash in hand of the business. Hence, the assessee is in the industry which can be said as a cash oriented industry, therefore, cash deposited in the bank account should not be doubted. Besides, same pattern of cash deposit, we have observed in previous years and in subsequent years. We note that assessee has submitted audited financial statement, cash book, bank book and the list of debtors and creditors etc, before the assessing officer. The assessee prepared a comparative chart of cash deposited during previous year, current year and subsequent year, with the help of the books of accounts, and after examination of the comparative chart of cash deposit, we find that assessee -company is engaged in cash oriented business, where cash receipts and payments are involved, hence such cash deposit is out of the business activities. We note that it is assessee’s prerogative to decide how the business will run and how much cash balance is to be kept and when the amount is to be withdrawn and when the amount is to be deposited in the Bank account. The assessing officer did not find any evidence that the assessee has deposited the cash in the bank account out of his unaccounted cash.

17.We note that Ld. DR for the Revenue submitted written submission and the sum and substance of the written submission is that the assessee has not explained the cash deposited in the bank account and did not explain the payment to the parties made by the assessee against the URD purchases. However, we note that the assessee has made the payment against the URD purchases approx. Rs.5 Crore, during the assessment year under consideration and this fact had already been narrated by the Ld. CIT(A) in his order.We note that during the course of appellate proceedings, before ld.CIT(A), assessee has relied upon various submission filed on e-filing portal and contended that the assessing officer has passed assessment order hurriedly and his observation that assessee has not filed evidences as called for is incorrect. The assessee has Page 10 of 27 2017-18 DCIT vs. Vaibhav Ginning Spinning Mill Pvt. Ltd. referred to submissions during the course of assessment proceedings on 20.11.2019, 20.12.2019, 25.12.2019, 26.12.2019 and 27.12.2019 on e-filing portal along with the details as required by the assessing officer. With regards to claim of the assessing officer that assessee has not made any URD purchase in case, assessee has referred to submission dated 20.12.2019, which contained a summary of source of cash available and its utilization vide point No.34 wherein it is clear that assessee had made payments of Rs 4,98,21,831/- during the period from 01.04.2016 to 08.11.2016 and Rs. 1,52,22,199/- during the period from 31.12.2016 to 31.03.2017. The assessee has also claimed that details of sundry creditors / trade payables in a particular format and contra confirmation in case of certain creditors vide point No. 10 of the notice u/s 142(1) of the Act which have provided in the particular manner as called for vide our submission dated 20.12.2019. Similarly, assessee has claimed that details of purchase and sales were provided to the assessing officer and details of quantitative stock register were not called upon hence same was not provided.

18.

The assessee has further contended before ld.CIT(A) that its head office is situated in remote area far from the population of a small village hence they cannot take risk of keeping cash in physical form at the office. Therefore, the cash is being kept at residences of its directors. On a particular day, when the director is not available, assessee had to make withdrawal from the bank for our business need. Thus, on some of the instances, when the cash on hand was sufficient, assessee might have compelled to make further withdrawal from the bank. The assessee has further explained that for its business raw cotton is procured from agriculturists. It is a settled scenario that assessee has to make purchase of raw cotton in cash only. As per the cycle of cultivation of cotton, the harvesting of cotton and supply of raw cotton starts after Diwali hence they were also ready with cash balance on hands to purchase raw cotton in Page 11 of 27 2017-18 DCIT vs. Vaibhav Ginning Spinning Mill Pvt. Ltd. uninterrupted manner during the year under consideration and when demonetization was announced, such cash was immediately deposited in bank account. The assessee has further claimed that the assessing officer has not brought any specific defects in books of account hence he was not justified in treating cash deposit as unexplained u/s 69A of the Act. The assessee has submitted comparative chart of availability of cash balance, sources of cash balance for current year as well as preceding years to explain that cash withdrawals are in similar pattern and cash deposits in bank accounts were only out of such available cash withdrawals and balance. The assessee has also relied upon various judicial pronouncements in support of its claim that addition of cash deposit cannot be made u/s 69A of the Act.

19.

The ld. CIT(A) observed that assessment order was passed by the assessing officer u/s 143(3) of the Act and he has accepted book results shown by assessee except making addition of Rs 9,75,50,000/- out of aggregate cash deposited post demonetization for Rs 12,29,50,000/- in bank account. The assessing officer has not doubted purchase or sales or Gross profit or net profit as shown in audited annual accounts and in return of income. On perusal of paper book submitted by assessee, it is found that assessee has filed various submissions dated 20.11.2019, 20.12.2019, 25.12.2019, 26.12.2019 and 27.12.2019 on e-filing portal. It was observed that during the course of assessment proceedings, assessee has provided copy of cash book along with bank statements vide letter dated 20.12.2019 which is not disputed by the assessing officer. On perusal of notice u/s 142(1) issued in assessment proceedings, it is found that the assessing officer has not issued any specific details regarding URD purchases in cash hence observation of the assessing officer that assessee has not made any URD purchase in cash even considering his peculiar business of cotton ginning is incorrect. On the contrary, the assessee had submitted complete cash book for year under consideration as well

Page 12 of 27 2017-18 DCIT vs. Vaibhav Ginning Spinning Mill Pvt. Ltd. as earlier years from which it pointed out that URD purchases in cash is already made and reflected as part of purchase account in Profit & loss account. It is observed that issue in present appeal is not regarding whether assessee has made URD purchase or not but while making addition u/s 69A of the Act, the assessing officer has doubted availability of cash in absence of URD purchase. In present case, assessee had made URD purchase in cash and stated that assessee had made payments of Rs 4,98,21,831/- during the period from 01.04.2016 to 08.11.2016. The assessee had submitted following details to prove that URD purchases are made in cash:

20.

The ld.CIT(A), on perusal of notice u/s 142(1) of the Act, noticed that assessee was asked to provide details of sundry creditors / trade payables in a particular format and contra confirmation in case of certain creditors. The assessee has provided such details vide letter dated 20.12.2019. The relevant extract of reply filed by assessee is reproduced herein below:

“10. Details of sundry creditors: We are furnishing herewith the details of sundry creditors/trade payables in the format provided by your authority alonwith the copy of ledgers with full narration and contra confirmation of the creditors of having balance of Rs.5,00,000/- or more at the end of the year as on 31.03.2017 on sample basis and list of sundry creditors of Rs.1,00,000/- or more at the end of the year as on 31.03.2017 at Annexure-K1 and Annexure-K2.”

Page 13 of 27 2017-18 DCIT vs. Vaibhav Ginning Spinning Mill Pvt. Ltd. However, no further details were asked by the assessing officer in assessment proceedings hence conclusion of the assessing officer in para 6.5 of assessment order that assessee has failed to provide such details is incorrect.While passing the assessment order, the assessing officer at para 6.6 of his order has observed that details of purchases and sales alongwith quantitative details were not provided. On perusal of notice u/s.142(1) of the Act along with replies filed during the course of assessment proceedings, it is found that assessee has submitted details of purchase and sale along with VAT return. However, the assessing officer has not asked for quantitative details in notice u/s.142(1) of the Act hence it cannot be said that such details were not provided. Even otherwise, on perusal of assessment order, it is apparent that the assessing officer has accepted book result as shown by assessee. Had the assessing officer have any doubt regarding genuineness of such purchase or sale, he ought to have rejected books of account and estimated net profit/gross profit as the case may be.It is also relevant to refer extracts of show cause notice dated 20/12/2019 issued by the assessing officer.

“Further, during the demonetization period, you had deposited cash of Rs. 12,29,50,000/- in the account held with State Bank of India - A/c No. 31559184504. In this regard, you have asked to furnish requisite details in respect of explanation of source of the cash. Till date, nothing has been heard from you. Therefore, you are hereby show caused as to why the same should not be added to the total income for the year under assessment u/s 69A of the IT Act, 1961 being unexplained cash Your reply should to reach to this office within stipulated time period. If you fail to submit your reply, it would lead to presume that there is nothing to say in the matter and assessment will be finalized u/s 144 on the basis of facts and materials available on the record. No further adjournment or extension of time will be allowed as you had already enjoyed sufficient time in this case”. It can be seen from such show cause notice that the assessing officer has asked assessee to submit it explanation regarding sources of cash and why such amount should not be taxed u/s 69A of the Act. However, the assessing officer has not pointed out specific instances or observation as is made in assessment order which means that various observations made in Page 14 of 27 2017-18 DCIT vs. Vaibhav Ginning Spinning Mill Pvt. Ltd. assessment order including high cash withdrawal from bank inspite of having cash balance are never confronted to assessee.

21.

The ld.CIT(A) noted that so far as addition u/s.69A of the Act is concerned, it is observed that sources of cash deposits are out of available cash balance with assessee. The assessee had submitted following tabular chart to support its contention that even in the month of October on year to year basis, it has sufficient cash on hand and it is not the first year where such huge cash balance was generated.

It can be seen from above tabular chart that assessee had cash balance as on 31.10.2015 at Rs. 10.01 Crores in comparison of Rs. 12.96 Crores in current year hence argument of the assessing officer that assessee has shown exaggerated cash balance on hand without availability of such cash is incorrect. The assessee has further submitted following tabular chart to explain sources of cash deposits made by it post announcement of demonetization.

Page 15 of 27 The assessing officer himself has considered cash withdrawal of Rs.2.54 Crores as explained sources for subsequent cash deposit in bank account during demonetization. On perusal of above referred chart it can be seen that assessee has made cash deposit of Rs.4.81 Crores from April 2016 to October 2016 which is considered as explained by the assessing officer in assessment order. The nature of business, modus- operendi of the business, availability of cash balance, pattern of cash withdrawals all are remain same throughout the year as well as in preceding years and the assessing officer has just partially denied the sources of cash deposit as such cash deposits are made post demonetization and such contention of the AO cannot be accepted more particularly when the assessing officer himself has not denied such cash withdrawals, books results shown by assessee on year to year basis.

22.

The assessee had also submitted following details of cash withdrawals on year to year basis as under-

Page 16 of 27

It is observed that the assessee throughout the year had made huge cash withdrawals as well as in preceding years and same has been claimed to be sources of subsequent cash deposits which are accepted by the assessing officer in pre- demonetization period hence there is no reason for not accepting partial cash deposits post announcement of deposits merely on presumption that assessee might have utilized such cash for elsewhere it is relevant to refer to decision of the Hon'ble Jurisdictional High Court of Gujarat in case of CIT Vs. Manoj Indravadan Chokshi [2014] 50 taxmann.com 419 wherein it was held as under:

"Section 68 of the Income-tax Act, 1961-Cash credits (Bank deposits)-Assessment year 2009-10-Whether once source of cash deposit in bank account is explained, subsequent withdrawal is not required to be explained Held yes Assesse explained cash deposit in bank account by submitting names of persons from whom unsecured loans were taken Whether merely because assesses withdrew cash Instead of sufficient cash balance available with him and subsequently redeposited same in bank account for his own use, no addition could be made Held, yes [Para 4] [in favour of assessee)" While passing the assessment order, the AO has observed that entire available cash was not deposited by assessee immediately. It is observed that assessee has made cash deposit of Rs.65,00,000/- on 10/11/2016, Rs. 11,64,45,000/- on 12/11/2016 and Rs.26,000/- on 15/12/2016 which cannot be considered as delayed deposit post announcement of demonetization on 08/12/2016 as there was bank holiday on 09/12/2016 and immediately on two to three days, assessee had deposited available cash in bank account.

23.

The ld.CIT(A) noticed that so far as observation of the assessing officer that the assessee was not having physical cash on hand and cash withdrawal

Page 17 of 27 2017-18 DCIT vs. Vaibhav Ginning Spinning Mill Pvt. Ltd. might have been utilized somewhere and unaccounted cash was deposited in bank account, it is observed that observation of the assessing officer is without any evidences. The assessing officer has not made any independent inquiries regarding alleged utilization of available cash other than what has been explained by the assessee. It is relevant to refer to decision of the Hon'ble Ahmedabad Tribunal in case of Sudhirbhai Pravinkant Thaker Vs. ITO [2017] 88 taxmann.com 382 wherein it was held as under:-

"Head Note: Section 68 of the Income-tax Act, 1961 Cash credit (Bank deposit) -Assessment year 2008-09-When assessee had demonstrated that he had withdrawn cash from bank and there was no finding by authorities below that this cash available with assessee was invested or utilized for any other purpose, it was not open to authority to make addition on basis that assessee failed to explain source of deposits [In favour of assessee] "4. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below as well as the judgements relied upon by the Id. counsel for the assessee. There is no dispute with regard to the fact that the assessee had deposited the cash of Rs.11,27,800/-starting from 07/06/2007 to 31/02/2008. …………………………………….However, cash was deposited in the bank account after 13/06/2007 of Rs. 1,52,800/- So far as the amount of Rs.83,000/- is concerned, i.e. matching from withdrawals and deposits and rest of the amount, there is a gap between withdrawals and deposits of the amount. In respect of deposit made on 13/02/2008 is also within one month from the withdrawal of amount on 07/01/2008, In respect of other entries, the cash withdrawal is even before one year of deposit of the amount. The contention of the assessee is that the amount was kept as cash in hand. The authorities have doubted about the explanation furnished by the assessee. The authorities below have doubted the source of the cash deposits, however, the contention of the Id. counsel for the assessee is that h had withdrawn the amount from his bank account and there is no finding by the authorities below that the cash withdrawn by the assessee was utilized for any other purpose. In the absence of such finding, addition is not justified. We find merit into the contention of the Id, counsel for the assessee that there is no dispute that the amount which was withdrawn by the assessee on various dates during the year 2006 was available with him for making deposits. In the absence of finding that the amount which was previously withdrawn by the assessee had been utilized for any other purpose merely on the basis of conjecture that the amount might have been utilized for any other purpose and was not available with the assessee for making the deposits, we are unable to accept the reasoning of the authorities below. In our considered view, when the assessee has demonstrated that he had withdrawn cash from the bank and there is no finding by the authorities below that this cash

Page 18 of 27 2017-18 DCIT vs. Vaibhav Ginning Spinning Mill Pvt. Ltd. available with the assessee was invested or utilized for any other purpose, in that event, it is not open to the authority to make the addition on the basis that the assessee failed to explain the source of deposits. Moreover, the authorities below have not disputed the fact that the assessee had withdrawn amount of Rs.9,10,000/- before the deposits made on various dates during the FY 2007-08. Therefore, the orders of the authorities below are set aside and the assessing officer is directed to delete the addition. Thus, ground raised in the assessee's appeal is allowed."

24. The ld.CIT(A) also relied to decision of the Hon'ble Ahmedabad ITAT in the case of Radhe Developers (India) Ltd in dated 16/11/2023 wherein it is held as under.-

"10. We have heard the rival contentions of both the parties and perused the materials available on record. In the present case, the cash deposited by the assessee was treated as unexplained income of the assessee by the assessing officer on the reasoning that the assessee failed to make satisfactory explanation regarding the sources of such cash deposit. The assessee during assessment as well appellate proceeding before the learned CIT(A) explained that the cash was deposited out of the opening cash balance and cash withdrawal made in the year under consideration. As such the assessee explained that the cash was withdrawn for the purpose of purchase of land, but the land deal did not materialize, hence the same was redeposited. However, neither of the lower authorities agreed with the explanation of the assessee and accordingly an addition was made by the assessing officer which was, subsequently, confirmed by the Id. CIT-A.

Α.Υ. 2016-17 10.1 From the order of the assessing officer and the learned CIT(A), we note that the assessee offered explanation regarding the sources of deposit made in the bank accounts and in support its explanation furnished copy of cash book and bank books. The activity of the assessee, ie, withdrawing the huge cash, keeping the same in hard form for a considerable period and finally re-depositing the same in the bank account, might appear to be very unusual. It is because no prudent businessman will do so, particularly in a situation where there was already sufficient cash in hand available with the assessee all the time. Indeed, a suspicion arises in the mind for the genuineness of the transaction on hand as discussed above. 10.2 However, it is the settled law, a suspicion cannot take the place of the evidence as held by Hon'ble Supreme Court in the case of CIT vs. Daulat Ram Rawatmull reported in 53 ITR 574, the relevant extract reads as under. "The circumstances relied upon by Mr. Sastri do raise suspicion, but suspicion cannot take the place of evidence." 10.3 For the sake of repetition, we also note that indeed, the activity of withdrawing the cash, keeping the same as it is and redeposit the same in the bank after considerable period is very unusual practice but there is no prohibition under any of the law for the time being in force for doing such activity. Thus, merely an unusual activity of the assessee does not give an Page 19 of 27 2017-18 DCIT vs. Vaibhav Ginning Spinning Mill Pvt. Ltd. authority to the revenue to make the addition to the total income of the assessee. 10.4 In fact the assessee in the given facts and circumstances has discharged the onus imposed under the provisions of section 68/69 of the Act by furnishing the necessary details which have been elaborately discussed in the preceding paragraph. Thus, the onus shifted upon the revenue to disprove the contention of the assessee based on the tangible materials. But we note that the learned DR has not brought any iota of evidence suggesting that the amount of cash deposit was not out of the cash withdrawal from the bank, Likewise, there was no Information that the assessee has spent the cash withdrawal somewhere else towards the capital or revenue expenses. At this juncture, we also find pertinent to refer the order of this tribunal in case of Sudhirbhai Pravinkant Thaker vs. ITO reported in 88 taxmann.com 382, wherein similar facts and circumstances it was held as under: 4. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below as well as the judgements relied upon by the Id. counsel for the assessee. There is no dispute with regard to the fact that the assessee had deposited the cash of Rs. 11,27,800/- starting from 07/06/2007 to 31/02/2008. The cash withdrawn from the bank was of Rs.4,20,000/- on 01/07/2006, Rs.4,90,000/- on 06/07/2006, Rs.83,000/- on 26/06/2007, Rs.51,000/- on 20/11/2007, Rs.1,28,000/- on 14/12/2007 and Rs.2,00,000/- on 07/01/2008, However, the cash was deposited on 07/06/2007 of Rs.2 lacs, on 08/06/2007 of Rs 2 lacs, on 11/06/2007 of Rs.1,50,000/-, on 12/06/2007 of Rs.2 lacs, on 13/06/2007 of Rs.2,25,000/-. The total deposits till 13/06/2007 was of Rs.9,75,000/- and the amount withdrawn till 06/07/2006 was of Rs.9,10,000/- (Rs.4,20,000 + 4,90,000). Rest of the deposits of the total addition were made on 18/06/2007, 26/06/2007 and 13/02/2008. However, withdrawal after 06/07/2006, the assessee had withdrawn on 26/06/2007 of Rs.83,000/-, on 20/11/2007 of rs.51,000/-, on 14/12/2007 of Rs.1,28,000/- and on 07/01/2008 of Rs. 2,00,000/-, From 20/11/2011 to 07/01/2008 the assessee had withdrawn total amount of Rs. 3,79,000/-, However, cash was deposited in the bank account after 13/06/2007 of Rs. 1,52,800/-. So far as the amount of Rs. 83,000/- is concerned, i.e. matching from withdrawals and deposits and rest of the amount, there is a gap between withdrawals and deposits of the amount. In respect of deposit made on 13/02/2008 is also within one month from the withdrawal of amount on 07/01/2008. In respect of other entries, the cash withdrawal is even before one year of deposit of the amount. The contention of the assessee is that the amount was kept as cash in hand. The authorities have doubted about the explanation furnished by the assessee. The authorities below have doubted the source of the cash deposits, however, the contention of the ld. counsel for the assessee is that he had withdrawn the amount from his bank account and there is no finding by the authorities below that the cash withdrawn by the assessee was utilized for any other purpose. In the absence of such finding, addition is not justified. We find merit into the contention of the ld. counsel for the assessee that there is no dispute that the amount which was withdrawn by the assessee on various dates during the year 2006 was available with him for making deposits. In the absence of finding that the amount which was previously withdrawn by the assessee had been utilized for Page 20 of 27 any other purpose merely on the basis of conjecture that the amount might have been utilized for any other purpose and was not available with the assessee for making the deposits, we are unable to accept the reasoning of the authorities below. In our considered view, when the assessee has demonstrated that he had withdrawn cash from the bank and there is no finding by the authorities below that this cash available with the assessee was invested or utilized for any other purpose, in that event, it is not open to the authority to make the addition on the basis that the assessee failed to explain the source of deposits. Moreover, the authorities below have not disputed the fact that the assessee had withdrawn amount of Rs.9,10,000/- before the deposits made on various dates during the FY 2007-08. Therefore, the orders of the authorities below are set aside and the assessing officer is directed to delete the addition. Thus, ground raised in the assessee's appeal is allowed. 10.5 We also find pertinent to refer the order of Hon'ble Gujarat High Court in the case of Commissioner of Income-tax v. Shailesh Rasiklal Mehta reported in 176 taxman 270 wherein similar facts and circumstances it was held as under:

8. In relation to the first question it is an admitted fact that there was no evidence to disbelieve or disprove the fact that sufficient cash was available in the cash book on the two dates for making the deposits and there was no reason found by the Tribunal for disbelieving the books of account maintained by the assessee as narrated in paragraph No. 31.1 of the impugned order.

9. These are pure findings of fact recorded after appreciation of evidence and do not give rise to any question of law, much less a substantial question of law. 10.6 In view of the above, there cannot be any addition to the total income of the assessee on account of cash deposited in the bank unless the revenue demonstrates that the amount in question has been used by the assessee for any other purpose. Thus, in our considered view the addition on account of cash deposit in the bank is based on assumption and presumptions of wrong facts which is bad in law. 10.7 Regarding the reliance placed by the revenue on the judgement of Hon'ble Delhi High Court in the case of Shri Dinesh Kumar Jain Vs. PCIT reported in 97 taxmann.com 113, in our humble understanding, we note that the facts of that case are distinguishable from the facts of the present case. In the case of Shri Dinesh Kumar Jain, the assessee could not furnish the necessary details about the expenses incurred for the purpose of the construction. As such, the addition was confirmed by the Hon'ble Delhi High Court in the case of Shri Dinesh Kumar Jain in the absence of supporting documents whereas in the present case the fact that the money was withdrawn from the bank has nowhere been doubted which strongly indicates that there was cash available with the assessee. The revenue has also not brought anything on record suggesting that the cash withdrawn from the bank has been utilized elsewhere. Thus, in our humble understanding the principles laid down by the Hon'ble Delhi High Court are not applicable in the instant set of facts.

Page 21 of 27 2017-18 DCIT vs. Vaibhav Ginning Spinning Mill Pvt. Ltd. 10.8 Likewise, the principles laid down by the Hon'ble Supreme Court in the case of Shri Roshan Di Hatti Vs. CIT reported in 2 SCC 378 are not applicable in the case of the present assessee. It is for the reason that in the case of Shri Roshan Di Hatti, the assessee failed to prove the necessary supporting documents with cogent reasons whereas in the present case, the assessee has furnished all the necessary documentary evidence discussed above. 10.9 In view of the above elaborate discussion and considering the facts in totality, we hereby set aside the finding of the learned CIT(A) and direct the assessing officer to delete the addition made by him. Hence, the ground of appeal of the assessee is hereby allowed.

11. In the result, the appeal of the assessee is hereby allowed."

25. The ld.CIT(A) also relied on the decision of Hon'ble Ahmedabad Tribunal in case of The DCIT, Central Circle-1(2), vs. M/s. Sarthav Builders vide dated 27 April, 2022 wherein on similar facts addition made by Assessing Officer u/s.69A was deleted. It is relevant to refer to decision of the Hon'ble Calcutta High Court in the case of CIT Vs Associated Transport Pvt Limited 212 ITR 417 wherein it is held as under.-

"Section 69A of the Income-tax Act, 1961 Unexplained moneys Assessment year 1979-80-Assessing Officer treated high denomination notes worth Rs. 81,000 as unexplained money, disbelieving assessee's explanation as to how he came into possession of same and added same in income of assessee and also imposed penalty Tribunal found that assessee had sufficient cash in hand and in books of account of assessee cash balance was usually more than Rs. 81,000- It, deleted addition and cancelled penalty Whether finding of Tribunal being on basis of appreciation of facts against which no question of perversity had been raised, Tribunal was right in deleting addition and consequent penalty - Held, yes" 6.14 So far as cash deposited during demonetization is concerned, on similar facts, the Hon'ble Delhi ITAT in case of Om Parkash Nahar vs Income-tax Officer vide IT Appeal No. 960 (DELHI) OF 2021, [2022] 135 taxmann.com 377 (Delhi - Trib.) dated: 27.01.2022 has held as under: "Section 69A of the Income-tax Act, 1961 Unexplained moneys (Cash deposits during demonetization) - Assessment year 2017-18-Assessee was a retired Government Servant, deriving income from pension, bank interest and also earning rent from property as a Karta of HUF - He had deposited cash of Rs. 63.63 lakhs in his bank account during demonetization - Assessee explained that he was in habit of withdrawing money and keeping in form of cash at home and amount was deposited out of withdrawals from same account from time to time made during years 2014, 2015 and 2016, because of his serious illness and old age -Assessing Officer however, disbelieved assessee and made additions to income of assessee Commissioner (Appeals) gave part relief and Page 22 of 27 restricted addition to Rs. 44.13 lakhs after holding that cash of Rs. 19.50 lakhs withdrawn from account could be held to be out of money withdrawn from bank account, which was deposited after demonetization - It was found that assessee had no source of income apart from rental or pension income and some interest amount and same income earned regularly had been withdrawn regularly leaving very less cash in bank account and even after household withdrawal, there was a huge amount available with assessee in form of cash - Whether in absence of any adverse material, it could not be presumed that cash deposited by assessee was out of some undisclosed source and thus, addition as sustained by Commissioner (Appeals) was to be deleted - Held, yes [Para 10] [In favour of assessee]" 6.14.1 The Hon'ble Mumbai Tribunal in case of Jet Freight Logistics Ltd. vs. Commissioner of Income-tax Appeal (NFAC) [2023] 146 taxmann.com 349) has held that "Where entire cash deposits made by assessee during demonetization period in Specified Bank Notes stood properly explained by availability of cash balance in its books, no addition thereon could be made under section 68." 6.14.2 The Hon'ble Mumbai ITAT in case of R. S. Diamonds India (P.) Ltd. Vs. ACIT[2022] 145 taxmann.com 545 held that "Where assessee deposited cash into bank account during demonetization period from cash balance available in account books, no addition u/s 68 can be made." 6.14.3 The Hon'ble Delhi ITAT in the case of DCIT Vs. Jagdamba Contractors And Builders Ltd. in dated 23.04.2024 has held as under:- "7. We have heard both the parties and perused the material available on record. In the present case on 22.11.2016 the police intercepted two vehicles carrying cash amounting to Rs. 2,22,76,000/- which belongs to M/s Omaxe Limited. Consequently, a survey was conducted on 22.11.2016 at office of M/s Omaxe Limited at (1) Kalkaji, New Delhi, (2) Shop No-19B, 1st Floor, Omaxe Celebration Mall, Sector-48, Gurugaon and (3) Omaxe Residency 2 Gomti Nagar Extension, Amar Shaheed Path, Lucknow. During the course of survey at registered office of M/s Omaxe Limited, the cash in hand as on 08.11.2016 and cash deposited during the demonetization were impounded.

During the assessment proceedings, a show-cause notice dated 16.12.2019 was issued to the Assessee to explain the closing cash balance as per pages impounded and to explain the source of cash deposit. In response, assessee submitted that the impounded pages contain cash balances of Rs. 1,11,75,337/- as on 08.11.2016 of various site office of the assessee but, does not contain cash balance as on 08.11.2016 of New Imprest-Real Estate MCB Rs. 7,91,77,139/-, Imprest Bhogal Godown Rs. 40,475/- and Sandeep Mangla- Imprest (Separate Ledger) Rs. 1,00,00,000/- and also submitted the summary / imprest maintained by of cash books showing cash balances as on 08.11.2016. Further the assessee has stated that the total cash balance as on 08.11.2016 available with the assessee including all cash books was Rs. 10,03,92,951/- out of which Rs. 9,13,00,000/- was deposited and explained that the cash in hand as on 08.11.2016 as source of cash deposit. It is the case of the Assessee that the source of cash deposit is out of earlier cash withdrawals from the statement bank relevant bank and submitted showing

Page 23 of 27 cash withdrawals, cash deposit, entire cash book for the period 01.04.2016 to 30.12.2016 and comparative charts for the year under consideration and preceding year.

Ld. assessing officer rejected the explanation and documents submitted by the assessee and proceeded with the addition of Cash deposit during the demonetization period of Rs. 9,09,98,000/- for following reasons:- (i) Cash withdrawal must be utilized and assessee could not mount cash for so long. (ii) Cash book is prepared in such a way that nearby cash withdrawal can be shown as cash deposit. (iii) On comparing charts of FY 2015-16 and FY 2016-17, there was no match of the cash deposits with the corresponding period of the previous year. (iv) All the sale are through Cheque/RTGS/DD therefore, no question of cash sale. (v) M/s Omaxe Limited has surrender a huge amount of unaccounted income, whereas the assessee has not disclosed the such income.

10.

During the appellate proceedings while deleting the above said addition, Ld. CIT(A) has given detailed finding on all the allegations made by the assessing officer. As regard allegation of cash withdrawal must be utilized and mounting of cash for a long period, the Ld. CIT(A) observed that the said allegation of assessing officer is not well founded as the A.O. has not established that the expenses of higher magnitude were being made in cash earlier and has now not been shown. As regards allegation of mounting of cash for a long period, the Ld. CIT(A) held that its mere surmise since the facts of maintenance of high cash balances across extended period of several months is supported by ITR, Audit reports, cash withdrawals from its bank account are matter of records and not subject to manipulation. Ld CIT(A) also held that wisdom behind maintaining higher cash balance cannot be subject matter of finger pointing by the assessing officer and is to be left to the business prudence of the assessee.

11.

Ld CIT(A) as regards allegation of 'cash book is prepared in such a way that nearby cash withdrawal can be shown as cash deposit' held that cash withdrawals or deposit are reflected in the bank statements as well as cash book and same cannot be manipulated. Ld. CIT(A) has also held that Ld. assessing officer has ignored the main cash book and considered only the site cash books for arriving at cash balance as on 08.11.2016, whereas the existence of main cash book cannot be denied since most of the cash deposits or withdrawals have been routed through main cash book. Therefore, the observation of Ld. assessing officer that cash book is prepared in such a way that nearby cash withdrawal can be shown as cash deposit is not tenable.

12.

As regards allegation of Ld. assessing officer on comparing charts of FY 2015-16 and FY 2016-17, there was no match of the cash deposits with the corresponding period of the previous year, Ld. CIT(A) has held that cash withdrawals and deposits are high and similar for both the financial years. Ld. CIT(A) also held that substantial cash withdrawals as well as deposits is very much regular feature of the business of the assessee. Therefore, the trend

Page 24 of 27 2017-18 DCIT vs. Vaibhav Ginning Spinning Mill Pvt. Ltd. of cash withdrawals and deposits were similar and not unusual in both the years.

13.

As regards allegation of Ld. assessing officer that all the sale are through Cheque/RTGS/DD therefore, no question of cash sale, Ld. CIT(A) has held that as a matter of fact the assessee has not shown any meaningful or unusual cash sales to explain the cash deposit during demonetization.

14.

As regards allegation of Ld. assessing officer that the flagship company, M/s Omaxe Limited has surrendered a huge amount of unaccounted income, whereas the assessee has not disclosed such income. Ld. CIT(A) has held that the surrender made by the flagship company does not automatically translate into any acceptance by the Assessee. Ld. CIT(A) also held that the surrender made by the flagship company is totally on different basis and not co-related to the addition made in the case of assessee.

15.

Lastly the Ld. CIT(A) has held that cash deposit during post demonetization is duly explained by cash balance available as on 08.11.2016, which was built up by cash withdrawals which are undisputed and opening cash in hand which is undisputed as the same tallies with the cash balance as on 31.03.2016 as per the ITR for A.Y. 2016-17.

16.

It is seen from the record that during the course of assessment proceedings, in order to explain the source of cash deposit as cash in hand on 08/11/2016 the assessee produced evidences such as copy of cash books, copy of bank statement, copy of response filed on income tax portal in response to the cash transaction queries and information related to cash transaction in the format prescribed by the Ld. assessing officer. The assessee has also explained the source as well as the reason of withdrawing cash along with the supporting evidence. Further in response to the show cause notice, the assessee has also explained that in the impounded documents contains cash balance as on 08.11.2016 of certain sites only and cash balance as on 08.11.2016 of New Imprest-Real Estate MCB, Imprest Bhogal Godown and Imprest Sandeep Mangla were not mentioned and in support of said contention the assessee submitted summary of all the cash books which shown the cash balance as on 08.11.2016.

17.

It is also pertinent to notice that the books of the assessee are audited, Ld assessing officer has not pointed any defect in the cash book of the assessee nor he rejected its book of account and only on the basis of assumption that the cash withdrawal have been utilized without corroborating the same. The Ld. CIT(A) has considered all the documents produced by the assessee and proceeded to delete the addition after countering each and every allegation made by the A.O. by appreciating material available on record. Further in the case of group companies involving identical issue arising out of same impounded documents and survey of same flagship company, the Co-ordinate Bench of the Tribunal decided the issue in the favor of the Assessee thereon, which are as under:  The DCIT, Central Circle 29, New Delhi vs. M/s Atulah Contractors and Construction Private Limited (ITA No. 2438/DEL/2022, J.K. 2017-18)

Page 25 of 27 2017-18 DCIT vs. Vaibhav Ginning Spinning Mill Pvt. Ltd.  The DCIT, Central Circle 29, New Delhi vs. M/s Bhanu Infrabuild Private Limited (ITA No. 2433/DEL/2022, J.K. 2017-18)  The ACIT, Central Circle - 1, Gurugram vs. M/s Omaxe Forest SPA and Hills Developers Limited (ITA No. 2/DEL/2023, J.K. 2017-18).  The ACIT, Central Circle 1, Gurugram vs. M/s Omaxe Housing and Developers Limited (ITA No. 47/DEL/2023, J.K. 2017-18). Considering the above facts and circumstances, and the orders of the Coordinate Bench of the Tribunal (supra), in our opinion, the Ld. CIT(A) has committed no error in deleting the additions made by the A.O. In view of the above discussion, we find no merit in the Grounds of appeal of the Revenue, accordingly, we dismiss the Grounds of Appeal of the Revenue.

18. In the result, the Appeal of the Department is dismissed."

26. In view of above, the ld.CIT(A) held that the assessing officer has accepted book results shown by assessee and sources of cash deposited during demonetization period is out of available cash balance only. The modus operendi of business, availability of cash balance, cash withdrawals from bank accounts, their subsequent deposits have remained same throughout the year wherein the assessing officer has accepted the same as shown by assessee hence there is no reason on part of the assessing officer to treat partial cash deposited during demonetization as unexplained income u/s 69A of the Act, hence considering factual discussion and legal matrix of the case, the ld.CIT(A) deleted the addition made of Rs.9,75,50,000/- u/s 69A of the Act. We have gone through the above findings of the learned CIT (A) and did not find any infirmity in the conclusion reached by the learned CIT( A).In the wake of above delineation, we see no error in the conclusion drawn by the CIT(A) in this regard. The CIT(A) in our view, has rightly deleted the addition. We, thus decline to interfere with the conclusion so drawn by the CIT(A) whose order is under challenge by the revenue. Considering the above facts and circumstances, we dismiss the appeal of the revenue.

27.

In the result, appeal filed by the revenue, is dismissed.

Page 26 of 27

Order is pronounced in the open court on 10/04/2026.

Sd/- Sd/- (Dr. Dinesh Mohan Sinha) (Dr. Arjun Lal Saini) �ाियक सद�/ Judicial Member लेखा सद�/Accountant Member //True Copy// Rajkot Date: 10/04/2026. आदेश की �ितिलिप अ�ेिषत/ Copy of the order forwarded to :  अपीलाथ�/ The Assessee  ��थ�/ The Respondent  आयकर आयु�/ CIT  आयकर आयु�(अपील)/ The CIT(A)  िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, सूरत/ DR, ITAT, Rajkot  गाड� फाईल/ Guard File By order, (Truce// Copy) Assistant Registrar/Sr.PS/PS ITAT, Rajkot

Page 27 of 27

DCIT, CENTRAL CIRCLE 2, RAJKOT, RAJKOT vs. VAIBHAV GINNING SPINNING MILL PVT. LTD., RAJKOT