Case Law Details
R.S. Diamonds India Private Limited Vs ACIT (ITAT Mumbai)
The Assessing Officer noticed that the assessee has deposited a sum of Rs. 45 lakhs into its bank account during demonetization period. It was explained that the above said amount represented cash balance available in its books of account, which included advance received from the customers towards sale over the counter. The Assessing Officer asked the assessee to provide details of customer who had given advances. It was explained that each sale made to the customer was less than Rs. 2 lakhs per transaction and hence it has not collected complete details of the customers. Hence, the Assessing Officer took the view that the assessee has failed to prove cash deposits made by it during demonetization period. Accordingly, he treated the cash deposits of Rs. 45 lakhs as unexplained cash deposit and assessed the same as income of the assessee under section 68 of the Act.
The facts that the deposit made into the bank account is from out of the books of accounts and the said deposits have been duly recorded in the books of account are not disputed. It is the submission of the assessee that it had received advance money from walk in customers for sale of jewellery over the counter and the amount so received was duly recorded in the books of account. The said amount alongwith other cash balance available with the assessee was deposited into the bank account after announcement of demonetization by the Government of India. He also submitted that the assessee has raised sale bills against the said advances in the name of respective customers. Since the transaction was less than Rs.2.00 lakhs, it was stated that the assessee did not collect complete details of the customers. Thus, it is seen that the advance amount collected from customers, the sales bill raised against them etc., have been duly recorded in the books of account. The impugned deposits have been made from cash balance available with books of account. I also notice that the Assessing Officer has not rejected the books of account. When cash deposits have been made from the cash balance available in the books of account, in my view, there is no question of treating the said deposits as unexplained cash deposit as opined by the Assessing Officer.
FULL TEXT OF THE ORDER OF ITAT Mumbai
The assessee has filed this appeal challenging the order dated 31.8.2021 passed by learned CIT(A)-National Faceless Appeal Centre, Delhi and it relates to A.Y. 2017-18.
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