ACIT Vs Ganesan Anbuselvam (ITAT Chennai)
ITAT Chennai held that addition under section 68 of the Income Tax Act rightly deleted by CIT(A) since cash deposit during demonetization duly reflected as cash sales and there was no abnormal spike in sales during demonetization.
Facts- The appellant, an Individual was engaged in the business of selling alcoholic beverages for human consumption under the name of Anbu Wines Bar. The appellant had deposited cash in his bank accounts, of Rs.58,62,000/- and Rs. 2,08,000/- in the form of SBN or i.e. demonetized currencies on various dates during the period of 09/11/2016 to 30/11/2016. In the Cash Transaction Report 2016, filed online by the appellant, he claimed that the nature of receipt was against cash sales. AO treated the said cash deposits as unexplained income u/s 68 r.w.s. 115BBE of the Act. Further, AO also observed that the appellant had made purchases for Rs 3,79,18,870/- but in the Profit & Loss Account, he had reported only Rs. 1,63,52,620/- as sales and closing stock of Rs. 17,54,210/-. Thus, the AO noted that the appellant had made unaccounted purchases. Hence, the unaccounted purchases of Rs.2,27,76,680/- was added by the AO to the income u/s 69C of the Act.
