Ankit Vijaykumar Jain Vs DCIT (ITAT Ahmedabad)
Cash Sales Recorded in Books Cannot Be Taxed Again u/s 68: ITAT Ahmedabad Deletes Demonetisation Addition & Commission Disallowance
The Ahmedabad Bench of the ITAT allowed the assessee’s appeal for AY 2017-18 and deleted the addition of ₹48.02 lakh made under Section 68 in respect of cash deposits during the demonetisation period, holding that the same represented recorded business receipts and sales duly reflected in audited books of account. The Tribunal noted that the assessee was a regular fabric trader, maintained audited books which were never rejected by the Assessing Officer, and had already offered the corresponding sales to tax. Once sales are accepted, treating the very same receipts as unexplained cash credits would amount to impermissible double taxation.
Relying on binding judicial precedents, including Gujarat High Court decisions, the ITAT held that Section 68 cannot be invoked for cash deposits forming part of recorded sales when books are accepted. Consequently, the application of Section 115BBE and initiation of penalty under Section 271AAC were also held to be unsustainable.
The Tribunal further deleted the disallowance of commission expenditure of ₹19.92 lakh, observing that the payments were made through banking channels, tax was deducted at source, similar expenses were allowed in earlier years, and there was no finding that the expenditure was bogus or not incurred wholly and exclusively for business purposes. Accordingly, the appeal was allowed in full.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
