Case Law Details
Jagdamba Optics Pvt Ltd Vs DCIT (ITAT Delhi)
Held that the cash sales and corresponding cash deposits have been a regular feature of the business of the assessee and there is certainly no abnormal trend of cash sales and cash deposit during the demonetization period. Accordingly, addition deleted.
Facts- The appellant company is a 100% importer wherein it purchases spectacle lenses from China and sells the same from a shop situated at Fatehpuri, Chandni Chowk, New Delhi and a shop-cum-godowns at Noida. The nature of the business of the assessee is such that it has wholesale as well as retail sale. The retail sales are generally over the counter sales to various customers like small shop keepers, sales representatives etc. Customers usually pay in cash and as such, the assessee normally has sufficient cash balance throughout the year. The cash received against such cash sales is subsequently deposited into the bank account of the assessee from time to time as per the convenience of the assessee.
Return was selected for scrutiny assessment under CASS. One of the reasons for taking the return for scrutiny selection was abnormal increase in cash deposits during demonetization period as compared to pre-demonetization period. AO concluded that the explanation given by the assessee regarding cash deposit of Rs. 39,92,742/- after announcement of demonetization is not satisfactorily explained and hence made the addition of Rs. 39,92,742/-.
CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
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