Jitendra Kumar Tahilramani Vs ITO (ITAT Jaipur)
ITAT Jaipur held that addition of the amount already recorded as cash sales cannot be treated as unexplained cash deposits under section 68 of the Income Tax Act. Accordingly, addition is deleted and appeal is allowed.
Facts- The assessee is engaged in the business of trading of manufacturing and trading of gold and diamond jewellery in the name and style of M/s Jai Jagdish Jewellers. The case of the assessee was selected for complete scrutiny manually to examine the issue of abnormal increase in cash deposits during demonetization period from 09.11.2016 to 30.12.2016.
AO observed that assessee’s sale in October 2015 was Rs. 21,13,210/- and from 1st November to 8th November 2016 same was Rs. 2,56,354/- totaling to Rs. 23,69,564/-, hence, this way the cash earned by the assessee out of genuine cash sale was worked out at Rs. 24,88,042/- after allowing weightage of 5% over last year turnover shown during this period and thereby ld. AO did not consider the sales to the tune of Rs. 37,95,560/- out of the cash deposited by the assessee between 01.10.2016 to 13.11.2016.
CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Held that when the cash sales were duly recorded in the books of account and even part of the sales were already considered and part was not considered only due to the fact that the assessee had deposited cash of Rs. 50,00,000/- on demonetization on single day on 13.11.2016. In support of the sales the assessee had submitted all the details as required under law and the ld. AO based on the same details accepted the part of the sales on same set of records. Thus, we see no reason to sustain the addition of the amount recorded as sales i.e., for an amount of Rs.37,95,560/- as “unexplained cash deposits” u/s 68 and thereby direct the ld. AO to delete the same.
