Jai Prakash Vs ITO (ITAT Chandigarh)
Audited Books & Consistent Sales Save the Day – ITAT Chandigarh Cuts Demonetisation Addition to Bare Minimum
The appeal was filed with a delay of 457 days, explained by Assessee through an affidavit stating that, due to lack of legal knowledge, he mistakenly re-filed appeal before CIT(A) instead of Tribunal. Tribunal held that the cause was bona fide, & applying principles of substantial justice & exclusion of time spent before wrong forum, condoned the delay u/s 253(5).
On merits, Assessee, a trader in cattle & animal feed with audited books & accepted turnover of Rs. 2.78 crore, faced an addition of Rs. 21,50,000 u/s 69A for cash deposits during November–December 2016. CIT(A) accepted availability of cash balance on 11.11.2016 & deleted Rs. 13,50,000, sustaining Rs. 8,00,000, holding that no Specified Bank Notes could exist post-11.11.2016.
Tribunal noted that the business was genuine, books were audited, sales were accepted, & no defects were found by AO. Cash balance of Rs. 21,01,266 on 11.11.2016 justified the Rs. 20 lakh deposit of the same date. For the remaining December deposits of Rs. 8,00,000, Assessee explained that they came from regular ongoing cash sales in small-town trade during transition period. Tribunal held that such explanation cannot be brushed aside when books & sales pattern remained consistent. However, allowing for minor discrepancies, it granted substantial relief. Accordingly, Rs. 5,00,000 was deleted & only Rs. 3,00,000 was sustained as a reasonable addition.
