JITEN DINESHCHANDRA MASHAR,AHMEDABAD vs. THE ITO, WARD 5(2)(2), AHMEDABAD

The grounds of appeal

1. 1. 1. 1. 1. 1. are as under:- “1. The Ld CIT(A) upheld Ld AO in making the addition of Rs 34,68,000/- u/s 69A without appreciating the fact that the said amount is duly recorded in the books of accounts maintained by the Assessee.

The Appellant reserves the right to add, alter, amend, or modify any of the grounds of appeal during the course of the appellate proceedings.”

The assessee filed return of income for assessment year 2017-18 on 26-09-2017 declaring total income of Rs. 6,86,760/-. The case of the assessee was selected for scrutiny for the reason that there was abnormal increase in cash deposits during demonetization period. The assessee is engaged in the business of sales and services of air conditioners and its installation. The statutory notices were issued by the Assessing Officer. The Assessing Officer observed that the assessee deposited cash of Rs. 30,94,000/- in various bank accounts during demonetization period. The assessee filed its details. The Assessing Officer observed that for the month of Sep, 2016 and Oct, 2016, the assessee has shown huge receipts from customers in lieu of cash sales in the month of winter season as compared summer month of April to August, 2016 which was abnormal trend of assessee’s business. The assessee has shown all the cash sales bills. So, there was no details provided related to customers like PAN, correspondence address of customers to the Department. The assessee made payment to the whole seller/stockiest/individual for purchase of air conditioners and its container on the same day of purchase or after few days of purchase when sale realised or fund available. The Assessing Officer held that the contention of the assessee could not be accepted and therefore made addition of Rs. 34,68,000/- u/s. 69A of the Act.

The ld. A.R. submitted that the assessee has duly recorded the amount of Rs. 34,68,000/- into regular books of account maintained by the assessee. Since the assessee has duly recorded the said amount, section 69A cannot be applicable in assessee’s case. The assessee has given details of cash withdrawals and on previous occasion which was from cash sales made before the demonetization period. The ld. A.R. submitted that the assessee has given the detail before the Assessing Officer and before the CIT(A) as follows:-

The ld. D.R. relied upon the assessment order and the order of the CIT(A).

We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that 3 Jiten Dineshchandra Mashar, A.Y. 2017-18 the assessee has given the cash book as well as bank book along with bank statements and purchase bills and the sales bills reflecting therein the cash payment as well as the cash withdrawals from time to time. After perusal of these documents, it appears that the assessee was regularly depositing the cash in the previous years as well. In the present year, the finding given by the CIT(A) that the assessee has not demonstrated such a huge sales bills appears to be not correct as the assessee has given all the details related to the purchase and sales. Therefore, the addition made by the Assessing Officer does not sustain.

In the result, the appeal of the assessee is allowed.