Divay Mohindru Vs ITO (ITAT Amritsar)
ITAT Amritsar Deletes ₹2.75 Cr Demonetisation Cash Deposit Addition: Sales Supported by Stock Register Cannot Be Disbelieved on “Human Probability”
The Amritsar Bench of the ITAT allowed the assessee’s appeal and deleted the addition of ₹2.75 crore made under section 69A (taxed under section 115BBE) towards cash deposits during the demonetisation period for AY 2017-18. The assessee, a jeweller, had deposited ₹4.09 crore during demonetisation, of which the AO accepted ₹1.34 crore as explained and treated the balance as unexplained, invoking section 145(3) partly and relying on “preponderance of probabilities”. The CIT(A) sustained the addition, holding that the assessee failed to satisfactorily explain cash sales immediately preceding demonetisation.
The Tribunal held that the books of account were regularly maintained and supported by a day-to-day quantitative stock register, purchase and sales registers, VAT returns, bank statements, and confirmations. Purchases and stock availability were not disputed, and there was no evidence of omitted or fabricated transactions. The ITAT ruled that book results cannot be rejected arbitrarily on human probabilities without specific defects, and once stock availability is accepted, sales out of such stock cannot be disregarded. Comparing business volume with the immediately succeeding year further supported the genuineness of sales. Accordingly, the cash deposits were held to be explained as arising from disclosed sales, and the addition under section 69A read with section 115BBE was deleted.
FULL TEXT OF THE ORDER OF ITAT AMRITSAR
