GURBACHAN SINGH ,LUDHIANA vs. AO, LUDHIANA

277 -Chd-2024 Gurbachan Singh, Ludhiana 2 2. The Assessee is aggrieved by the action of the ld. CIT(A) in confirming the addition of Rs. 18,05,000/- on account of unexplained cash deposits in the bank account of the Assessee. The Assessing Officer, during the assessment proceedings, noted that the Assessee had deposited an amount of Rs. 18,05,000/- in his bank account during the demonstration period. On being asked to explain in this respect, the Assessee submitted that the Assessee was in the business of trading of textiles cloth under the name and style of M/s Ajanta Textiles. It was submitted that the aforesaid amount was out of sale proceeds of the said business of the Assessee. To prove the aforesaid fact, the Assessee also produced audited accounts before the Assessing Officer (A.O.). However, the Assessing Officer did not agree with the aforesaid submissions of the Assessee observing that the Assessee has not furnished quantitative details of stock, and details of the persons to whom cash sales have been made. He, therefore, treated the aforesaid amount as income of the Assessee from undisclosed sources.

The ld. CIT(A) confirmed the addition so made by the A.O.

I have heard the rival contentions and gone through the material on record. At the outset, ld. Counsel for the Assessee has invited my attention to the pages 2 & 4 of the assessment order, 277 -Chd-2024 Gurbachan Singh, Ludhiana 3 wherein, the A.O. has compared the sales of the Assessee for impugned assessment year 2017-18 with that of the preceding assessment year 2016-17. A perusal of the chart given in para 4.2 of the assessment order would reveal that the total cash deposit in the bank account of the Assessee during the F.Y. 2015-16 were of Rs. 74,15,000/-. The amount of cash deposits from the period from 1.4.2015 to 18.11.2015 were of Rs. 36,70,000/-, whereas, the total cash deposit in bank account for the period from 9.11.2015 to 31.12.2015 were of Rs. 12,20,000/-. The total cash deposit in bank account in the F.Y. 2016-17 relevant to A.Y. under consideration were of Rs. 78,89,000/-. The total cash deposits during the period 1.4.2016 to 8.11.2016 were of Rs. 49,65,000/-, whereas, the total cash deposit from 9.11.2016 to 31.12.2016 i.e. during demonization period were of Rs. 21,94,000/-. A perusal of the aforesaid data would reveal that the Assessee’s cash sales have slightly increased from Rs. 74.15 lacs in F.Y. 2015-16 to Rs. 78.89 lacs in F.Y. 2016- 17. However, there is a proportionate increase of sales during the period 1.4.2015 to 8.11.2015 also, as the same were at Rs. 36.70 lacs from 1.4.2015 to 8.11.2015, whereas, it were at 49.65 lacs for the period from 1.4.2016 to 8.11.2016. Similarly, there is proportionate increase of cash deposit during demonetization period.

In the result, appeal of the Assessee stands allowed.