Rama Sharma Vs ITO (ITAT Delhi)
The addition made by the AO u/s 69A for deposited unexplained cash in her current bank account of firm and individual name during demonetization period – Deleted by ITAT Delhi as considered sale proceedings of business and past house hold savings
The amount deposited in bank were the sale proceeds of the goods traded in the business of the assessee and were duly recorded in the books of accounts. It was further submitted that on the sale of goods, VAT was duly paid to the government account and income arising out of trading business were duly offered to tax by the assessee vide her Income Tax Return filed for the AY 2017-2018 on 22.10.2017 vide acknowledgement number 251022001221017 declaring a total income of Rs. 264,700/-. The cash deposited in the bank were duly explained by the assessee vide its replies dated 17.01.2022 followed by submission dated 18.05.2022, substantiating the fact that the amount deposited in the bank account was duly recorded in the books of accounts of the assessee as sale of goods traded. For supporting this fact, Cash ledger of the assessee along with the sample sale and purchase invoices were duly submitted vide reply dated 18.05.2022. Further, the assessee has also substantiated on the fact that the assessee has deposited cash to the tune of Rs. 40,50,970/-, during the period 09.11.2016 to 31.12.2016, out of which Rs. 35,67,970/- was deposited in the current account held with Union Bank of India, and Rs 4,83,000/- was deposited in the savings account held with Punjab National Bank. The total cash deposited in the current account held with Union Bank of India is Rs. 35,67,970/-, out of which Rs. 4,40,000/- were in the Specified Bank Notes and the Balance of Rs. 31,27,970/- were either in new currency or the running notes of Rs. 500, Rs. 100, Rs. 50, Rs. 20 or Rs. 10 (Details already provided vide reply dated 17.01.2022 along with the copy of Deposit Slips of Bank). It was further submitted that the assessee has deposited Rs. 4,83,000/- in her savings account maintained with the Punjab National Bank. As already mentioned during the assessment proceedings, the same were in the Specified Bank Notes and were out of her past savings of Rs. 5,95,000/-, she has saved from her household expenses or gifts received from relatives for the future of herself and her family. The same shall not be added to her current year income, as it will be in-genuine hardship on the assessee. In light of the above facts, it is humbly submitted that the addition made by the AO is bad in law and against the facts and circumstances of the case and needs to be deleted. In support of the above contentions, Ld. AR filed the copy of bank account statement of Union Bank of India for the period 17.11.2016 to 31.3.2017; copy of bank account statement of Punjab National Bank for the period 4.8.2016 to 31.3.2011; copy of purchase register for the period 3.11.2016 to 31.3.2017; copy of sale register for the period 5.11.2016 to 31.3.2017; copy of stock register for the period 3.11.2016 to 31.3.2017l and copy of sample purchase and sale bills. It was submitted that during the demonetization period assessee had made cash deposits of Rs. 35,67,970/- in the Union Bank of India and Rs. 4,83,000/- in Punjab National bank. The said amounts has been deposited in lieu of resultant of sale proceeds of goods of general trade parlance and a sum of Rs. 5,95,000/- was deposited in respect of household savings (personal nature). However, in the respective year the assessee had deposited the total cash of Rs. 11,455,900/- in his accounts through the sale proceeds of retails sale of business goods of Rs. 10,780,287/- which was duly reported in the financial statements of the assessee, which clearly establish explanations relating to source of cash deposits through the sale proceeds of retail sale of business goods being deposited during the demonetization period.
