M/S. VINAY KUMAR,DELHI vs. ITO, NEW DELHI

The sole issue in the case is addition of Rs. 12.50 lakh as unexplained cash credit u/s 68 of the Act in assessment framed u/s 144 of the Act. None appeared from the assessee side therefore, we

The assessee is in the business of sale of dairy products and the explanation of the assessee is that the said amount of Rs. 12.50 lakh deposited in cash is out of sale proceeds of dairy products. Since no further explanation was furnished by the assessee, in the form of sale/purchase bills of the dairy products, the AO added the same u/s 68 which was upheld by the Ld. CIT(A).

Having heard the Ld. DR, we find that there is no dispute that the assessee is into business of sale of dairy products from which the assessee declares 10.5% gross profit for taxation purposes. We find that the addition is made solely on the basis of failure of assessee to produce the sale-purchase bills etc.

In the instant case, we find that the assessee has attempted to prove the entire source of cash deposit as cash sales of dairy products. Although the assessee, prima facie, appears to have discharged its onus of explaining source of cash deposit, it’s contentions to prove the source, hardly deserves to be accepted in entirety especially when the AO was not furnished with the documents /evidence to prove the sales/purchase. On the other hand, the Revenue’s endeavour to disbelieve the assessee’s contention that cash deposit has been made