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Facts
The assessee, a dealer of Pan Masala, Zarda and Gutkha, deposited Rs. 45,25,000 in her bank account during the demonetization period, claiming these as sale proceeds. The Assessing Officer (AO) and Commissioner of Income Tax (Appeals) [CIT(A)] treated this amount as undisclosed income.
Held
The Tribunal held that once the items were sold, the assessee could not demand non-demonetized currency and would be at a loss if she did not collect the money. Since the collected money was from sale proceeds and part of the turnover, it could not be treated as undisclosed income.
Key Issues
Whether the cash deposited during demonetization period, claimed as sale proceeds, can be treated as undisclosed income.
Sections Cited
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Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK
Before: SHRI GEORGE MATHAN & SHRI RAJESH KUMAR
आदेश / O R D E R Per Bench : This is an appeal filed by the assessee against the Ld.CIT(A), National Faceless Appeal Centre (NFAC), Delhi order dated 12/08/2024 passed in Appeal No. CIT(A),Cuttack/10731/2019-20 for the assessment year 2017-18. 2. At the outset, it is found that the appeal of the assessee is barred by 148 days. In this regard, the assessee has filed an affidavit stating sufficient reasons for condonation of delay, which are plausible and not found to be false. Ld.Sr. DR also did not raise any serious objection to condone the delay. Accordingly, the delay of 148 days in filing the appeal by the assessee is condoned and the appeal of the assessee is admitted for hearing.
It was submitted by the ld. AR that the assessee is a dealer of Pan Masala, Zarda and Gutkha. It was the submission that the assessee, had during the demonetization period, deposited cash to an extent of Rs.45,25,000/- in her bank account. It was the submission that the amount in question was the sale proceeds of the Pan Masala, Zarda and Gutkha. It was the submission that once this sell takes place, the items cannot be recovered and the currency that the purchaser pays, the assessee is compelled to accept. It was the submission that there is no claim by the revenue that the assessee has collected this money outside the books of account of the assessee. It was the prayer that the addition made by the AO and confirmed by the ld.CIT(A) should be deleted.
In reply, ld. Sr. DR vehemently supported the orders of the ld. AO and ld. CIT(A). It was the submission that the assessee was not authorized to collect the demonetized currency.
We have considered the rival submissions. A perusal of the facts of the present case shows that the assessee is a dealer of consumable items such as Pan Masala, Zarda and Gutkha. Admittedly, once these items are sold or consumed, there is no way for recovery of the same. Normally, such items are purchased and then the payments are made by the customers. Obviously, the assessee cannot demand non-demonetized currency in such a situation once the items already sold. This being so, he would be at a loss if the assessee not collects the money. The assesse