DCIT Vs Surendra Kumar Gautam (ITAT Agra)
ITAT Agra held that amount deposited during demonetization period cannot be treated as unexplained income since the amount is deposited out of genuine cash sales. Accordingly, appeal of revenue dismissed.
Facts-
The assessee is engaged in the business of trading of fertilizer. The case of the assessee was reopened on the basis of an information that the assessee deposited cash of Rs.3,14,65,500/- in his bank account during the demonetization period. AO noticed that the cash sales during the year under consideration till Septembr was below Rs.50 lakhs and suddenly in the month of October, it shoot upto Rs.1,07,21,520/-, which seemed to be abnormal to the Assessing Officer. AO further concluded that the assessee has failed to show that the impugned amount, as recorded in the books of account maintained by him, is out of genuine cash sales. AO, accordingly, treated the amount of Rs.69,28,000/- deposited in non-specified bank notes as assessee’s business income, however, remaining amount of Rs.2,45,36,500/- deposited in specified bank notes (SBN) was treated as unexplained income and added u/s. 69A of the Act.
CIT(A) deleted the impugned addition. Being aggrieved, revenue has preferred the present appeal.
Conclusion-
Held that it is self speaking and on the basis of the month-wise details of entire stock and sales along with copy of entire stock register, ld. CIT(Appeals) found that the assessee had a track record of deposits of cash before demonetization period, justifying such deposits in the bank during the normal course of business. The comparative details of cash deposits in the year 2013-14, 2014-15 and 2015-16 goes to show that the deposits in the month of October in these years was proportionately higher. The reason shown by the assessee that the sale of urea in the month of October was quite high, has rightly been accepted by the first appellate authority. Assessing Officer’s doubt in respect of the increase in sale in the month of October is based on conjecture and surmises, ignoring the quantitative details maintained in the stock register at his disposal during the assessment proceedings. This apart, an omission of a fact in audit report or alternate/inconsistent pleadings cannot be made basis to discard assessee’s cogent and convincing documentary evidence. It is not the case of the Revenue that the sales made by assessee in the month of October do not commensurate to the cash deposited in the bank account during this month. The impugned order does not suffer from any error of law or fact and is liable to be sustained. Aforesaid point is accordingly determined in negative against the revenue and in favour of the assessee. In the result, the revenue’s appeal is dismissed.
