Case Law Details
DCIT Vs Bawa Jewellers Pvt Ltd (ITAT Delhi)
ITAT Delhi held that provisions of section 68 of the Income Tax Act cannot be applied in relation to the cash sales receipt shown by the assessee in its books of accounts.
Facts- During the assessment proceedings, AO noticed that the assessee company has deposited cash of Rs.21,69,98,000/- from 09.11.2016 to 31.12.2016 during demonetization period and the assessee was asked to produce relevant documents in support of its cash deposits.
The assessee furnished month wise cash sales, cash deposits, purchases, opening cash in hand, advances from debtors, closing cash balances in hand. Assessee also submitted that generally the showroom will be closed around 8.30 pm but after Prime Minister’s Speech that 1000 and 500 currency notes would no longer be a legal tender after 12:00 midnight of 08.11.2016 there was a huge rush of customers pouring in the showroom to purchase which the assessee had never seen before. It was also submitted that the customers did not bother to look for the design of the jewellery and they were just ready to pick the products which were below Rs.2 lakhs as no one wanted to share the PAN details, contact details etc. The assessee submitted that the cash generated from out of cash sales was deposited in parts in its banks namely Kotak Mahindra Bank and Federal Bank Ltd.
The assessee also submitted that cash sales is a common phenomena in the business of the assessee company which is into manufacture of gold and diamond jewellery and the company is regularly depositing cash into bank account.
Please become a Premium member. If you are already a Premium member, login here to access the full content.