Vasudev Chotabhai Patel Vs ITO (ITAT Ahmedabad)
Petrol Pump Wins! Demon Cash Sales Accepted – ₹1.53 Cr Addition Deleted When Law Allowed Old Notes at Petrol Pumps, How Can AO Doubt Sales? -Suspicion is Not Evidence
Assessee is engaged in running a petrol pump. He filed return declaring total income of ₹27.41 crores. During demonetisation period, he deposited cash of ₹1.53 crores into his bank account. AO held that the Assessee failed to prove that this cash represented genuine sales & that sales during demonetisation were abnormally high compared to the rest of the year. AO treated the entire ₹1.53 crores as bogus sales, & added it as unexplained money u/s 69A, taxing it u/s 115BBE. CIT(A) confirmed the addition by stating that the Assessee failed to furnish evidence of actual sales.
Before Tribunal, the Assessee argued that the findings of lower authorities that no evidence was furnished were factually incorrect. He submitted complete purchase register, sales register, stock statements, VAT returns, etc. It was pointed out that total sales were ₹9.40 crores, out of which ₹7.65 crores were cash sales, & ₹1.53 crores were cash sales during demonetisation, which is proportionate to the overall cash sales of the year. The key argument was that Government Notification S.O. 3544(E) dated 24.11.2016 allowed petrol pumps to accept demonetised currency up to 15.12.2016, hence it was normal to receive higher cash during that period. The cash received was then deposited in the bank.
