Case Law Details
Rahul Cold Storage Vs ITO (ITAT Raipur)
ITAT Raipur held that addition u/s 68 as unexplained cash credit unsustainable as AO has not rejected the books of accounts. Accordingly, it can be concluded that by accepting the books of accounts AO has also accepted the cash deposits to have been sourced out of duly disclosed source.
Facts- During the course of assessment proceedings, it was observed by AO that the assessee deposited Rs. 38.55 Lacs during the demonetization and Rs. 8 Lacs. Assessee submitted that the same was made out of cash in hand that wat at the relevant point of time available at its business receipts. In support, assessee submitted monthly cash book and bank statements.
AO rejecting the submissions of the assessee, held the entire amount of Rs. 46.55 as its unexplained cash deposit u/s 68 of the Act. CIT(A) confirmed the addition. Accordingly, being aggrieved, the present appeal is filed.
Conclusion- If the assessee’s claim that the cash deposits in question were made out of its duly disclosed cold storage rent receipts was not to be accepted, then, the A.O was obligated to have rejected the books of account of the assessee, for the reason, that by not doing so he had on the one hand held the cash deposits to have been sourced out of an unexplained source, while for at the same time by accepting its books of account had accepted its claim that the cash deposits in duly accounted bank accounts were sourced out of the duly disclosed source of the assessee firm.
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