Girish Karamshi Dedhia Vs DCIT (ITAT Mumbai)
AO Can’t Cry ‘SBN Violation’ to Tax Genuine Sales – Demonetisation or Not – Once Sales Are in the Books, You Can’t Tax the Cash Twice
You Accepted Sales, You Accepted Profit; But You Taxed the Cash? ITAT Says NO- Section 69A Cannot Override Logic
ITAT Mumbai deletes addition on demonetisation cash deposits – Once cash sales & books are accepted, Section 69A cannot be invoked merely due to SBN notification.
Assessee, an individual running a petrol pump under the proprietorship “M/s. Autopushp”, filed his return declaring a loss. During AY 2017-18, he deposited ₹1,24,41,000 in old currency (Specified Bank Notes) during the demonetisation period. These deposits were duly recorded in the regular books of account as arising out of cash sales of petrol & diesel. All documentary evidence such as sales registers, stock records, VAT returns, cash books & audited financials were submitted before the AO.
However, AO treated the cash deposits as unexplained u/s 69A solely on the ground that Assessee’s petrol pump was not an outlet of a Public Sector Oil Marketing Company & therefore, as per Notification No. SO 3408(E) dated 08.11.2016, it was allegedly not authorised to accept SBNs. AO did not dispute the sales, did not reject the books u/s 145(3), nor did he point out any discrepancy in stock or VAT records. Yet, he treated the cash deposits as unexplained & made addition u/s 69A. CIT(A) confirmed the addition.
