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Income Tax Appellate Tribunal, “B” BENCH, KOLKATA
This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 11.09.2024 for the AY 2017-18.
The ground no.1 is not pressed at the time of hearing and therefore, the same is dismissed as not pressed.
The issue raised in ground no.2 to 4 is against the confirmation of addition by the ld. CIT(A) as made by the ld. Assessing Officer towards cash deposited during the demonetization period and also against the taxing the same u/s 115BBE of the IT Act.
5. In the appellate proceedings, the ld. CIT(A) dismissed the appeal of the assessee by observing and holding as under:-
“4.The findings of the AO are reproduced as under:- "In the instant case at hand, the assessee being an individual, maintaining of books ofaccounts is not mandatory and the assessee has never given a satisfactory explanation about the nature and source of acquisition of the money that has been deposited in her bank account. Hence, the reply to the show cause is not accepted Further, the assessee has not made any voluntary disclosure of the accumulated money in her hand through the PMGKY scheme or the IDS 2016. Moreover, the assessee has not denied the ownership of the cash deposited in her bank account number 005200101009327 of Corporation Bank on 15.11.2016 and 21.11.2016. In the light of the above, the total cash deposit of Rs 42,00,000/- narrated above is unexplained and hereby treated as income of the assessee for the FY 2016-17 and added back to her total income
The ground of appeal
No. 1 is general in nature and it does not require any specific adjudication. Accordingly, it is treated as dismissed.
6. The grounds of appeal No. 2 and 5 are inter-related and are in respect of addition of Rs. 42,00,000/- as income u/s 69A of the Act during the FY 2016- 17, treating them as unexplained.”
06. After hearing the rival contentions and perusing the available records we note that cash of Rs. 42 lacs were deposited in the bank account of the assessee on two dates during demonitisation. The ld. AR vehemently submitted before us that the cash deposited in the bank account of Rs.42 lacs during the demonetization period was disclosed in the return of income as miscellaneous income under the head other sources and due taxes were paid thereon. It was argued that the ld. Assessing Officer has accepted the return of income, wherein the assessee has added Rs.42 lacs towards cash deposited into bank account during demonitisation. However, the ld. Assessing Officer again added Rs.42 lacs towards the said cash deposited u/s 69A of the Act which resulted in double taxation of the same income which is not permissible under the Act and therefore, the same has to be deleted. The ld. AR in defense of his argument relied on the decisions of the co-ordinate bench in case of Shri Dinesh Kumar Singal Vs. ITO vide order dated 22.05.2023 in & in case of ITO Vs. Aakriti Jain vide order dated 14.06.2024 for A.Y. 2018-19, wherein it has been held that where the income has been offered in respect of cash deposited in the bank then the same cannot be added second time as it amounts to double taxation which is not permissible under the Act.
Further, the ld. DR contended d that the assessee paid the taxes on the said cash deposits but the assessee has not paid the taxes as per the provisions of Section 115BBE of the Act which provides for charging such income by way of cash deposited at a higher rate.
9. After hearing the rival contentions and perusing the materials available on record. We find that the assessee has deposited cash of Rs. 42 lacs in the bank account during the demonetization period and the same was added while filing the return of income under the head other sources and taxes were paid as applicable but not in accordance with Section 115BBE of the Act. We note that the ld. Assessing Officer has not disputed the return filed by the assessee, wherein the assessee has suomoto shown the cash deposit of Rs.42 lacs as income. However, made another addition over and above the income declared by the assessee towards cash deposited resulting into double addition of the same amount of income and also levied taxes at the rate as provided u/s 115BBE of the Act. In our opinion, the order passed by the ld. Assessing Officer and confirmed by the CIT(A) is totally wrong as the same income cannot be taxed twice. On the one hand the ld. Assessing Officer accepted the income declared by the “8. We have considered the findings of the ld. CIT(A) and the arguments put forward by the ld. DR. We have also considered the different case laws brought on record by the Counsel of the Assessee 481-Chd-2023- Aakriti Jain, Ludhiana and the written submissions filed during the proceedings before us. We are of the view that the finding of the ld. CIT(A) is logical and therefore, correct to the extent that once the purchase and stock of the Assessee has been accepted, there is no reasons to deny sale out of such stock and purchase. We also find that the A.O. has not rejected the books of account of the Assessee, so, once cash purchases / sales based on vouchers had been accepted, there is no point in making addition on the deposit of such cash in the bank account, particularity on cash sales.
We have also heard the rival submissions of the parties and perused the material available on record. The ld. Counsel for the Assessee has explained the source of such cash deposits and it has also explained that such cash sales are subject to VAT where VAT has been collected and deposited with the Government treasury. In support of her explanation, the Assessee has furnished the documents of the relevant period of VAT returns, copy of trading and profit and loss accounts and balance sheets, which are duly audited. We find that the Assessing Officer has accepted the cash sales and the Assessing Officer has also accepted the VAT collected and deposited in the Government account. Even the Assessing Officer has accepted the VAT returns filed by the Assessee and accepted by the 481-Chd-2023- Aakriti Jain, Ludhiana Indirect Taxes Department. Therefore, it clearly shows that the Assessing Officer has not doubted the availability of cash in the hands of the Assessee. Once availability of cash in the hands of the Assessee is accepted, then deposit of such cash in bank account cannot be rejected.
Lastly, we find that accepting the cash sale by the Assessee offered to tax, and then addition of same cash deposited in the bank, will amount of double taxation and the same is clearly unsustainable in the law and cannot be justified. Therefore, we find that the explanation offered by the Assessee is genuine, reasonable and duly supported by the documentation, books of account and audited accounts of the Assessee. Therefore, we find no reason to disturb the findings of the ld. CIT(A). Accordingly, Departmental appeal on this issue is dismissed.”
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 08.01.2025.