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Income Tax Appellate Tribunal, AGRA BENCH, AGRA
Before: SHRI M. BALAGANESH & SHRI SUNIL KUMAR SINGH
festivals like Diwali, Dhanteras, Bhaiya Duj and Karwa Chauth etc. fell in that period. The said explanation cannot be brushed aside considering the trend of the society in India wherein people make the purchases of jewellery during the festive season. [Para 10.3]
In the instant case also the assessee was maintaining complete stock tally, the sales were recorded in the regular books of account and the amount was deposited in the bank account out of the sale proceeds, therefore, the addition made by the Assessing Officer and sustained by the Commissioner (Appeals) was not justified. [Para 10.5]
The Assessing Officer made the addition on the basis of the statement of 'N', the then part time accountant of the assessee but no opportunity to cross examine to rebut the statement made by 'N' was allowed to the assessee and moreover nothing was brought on record to substantiate that cash obtained by the assessee from the sales which reduced the stock of the assessee was utilized elsewhere and that the cash sales made during the month of October 2016 were in the line of the cash sales in earlier years and was equal to the sales in the Month of July 2016, therefore, the addition made by the Assessing Officer and sustained by the Commissioner (Appeals) was not justified. (Para 10.7)
Further, sales made by the assessee to cover the cash deposited in the bank post-demonetization, was sufficient source of the cash deposited i.e., the sales from the existing stock available with the assessee and was well explained, therefore, the addition made by the Assessing Officer and sustained by the Commissioner (Appeals) was not justified. [Para 10.9]
Furthermore, the opening stock, purchases & sales and closing stock, declared by the assessee has not been doubted, the sales were made by the assessee out of the opening stock and purchases and the resultant closing stock has been accepted, the sales had not been disturbed either by the Assessing Officer or by the sales tax/VAT Department and even there was no difference in the quantum figures of the stock at the time of search on 12-4-2017, therefore, the sales made by the assessee out of the existing stock were sufficient to explain the deposit of cash (obtained from realization of the sales) in the bank account and cannot be treated as undisclosed Income of the assessee. [Para 10.11] The cash deposited post-demonetization by the assessee was out of the cash sales which had been accepted by the Sales Tax/VAT Department and not doubted by the Assessing Officer, 7 | P a g e there was sufficient stock available with the assessee to make cash sales and there was festive season in the month of October 2016 prior to the making of the cash deposit in the bank account out of the sales. So, respectfully following the orders by the various High Courts and the Co-ordinate Benches of the Tribunal, it is viewed that the impugned addition made by the Assessing Officer and sustained by the Commissioner (Appeals) was not justified, accordingly the same is deleted. (Para 10.13)..."
The AO has taken the figure of cash sales during the demonetisation only and have not taken cash sales made during the month of November and December 2016. The submission made by the appellant has been found correct. Therefore, the addition of Rs. 1,84,71,745/-made by the AO u/s 69A is deleted.”
We find that Ld. CIT(Appeals) has in the above quoted last para of the impugned order, observed that the Assessing Officer has taken the figure of demonetization period only and further he has stated that the figures of Nov. & Dec. 2016 were only taken, whereas his intention was to state for the remaining period. This seems to be a typographical/clerical error, hence, ignorable. In the instant case, it is not under dispute that the respondent assessee was running a retail diesel and petrol pump in the name and style of M/s. Shaheed Sultan Singh Filling Station and engaged in the sale of HSD, MS and oil. The aforesaid facts comprised in the impugned order goes to show that after considering the detailed submissions of the assessee, details of total sales reflected in the VAT return, including cash sales and cash deposited in the bank account during F.Y. 2015-16 and 2016-17 provided by the assessee and the comparative figures of cash sales and cash deposited during these two years, learned 8 | P a g e CIT(Appeals) has opined that the Assessing Officer has considered the cash sales made during the month of November and December, 2016 only, i.e., demonetization period only and not of the remaining period as actually intended by the first appellate authority. The revenue has failed to adduce any contrary evidence to discard assessee’s submissions. We, therefore, do not find any substantial error of fact or law to interfere with the impugned order. The aforesaid point is determined in negative against the appellant revenue. The revenue’s appeal is liable to be dismissed.
In the result, the revenue’s appeal is dismissed.
Order pronounced in the open court on 08.12.2025.