Case Law Details
ITO Vs Ashapura Petrochem Marketing Pvt. Ltd (ITAT Ahmedabad)
ITAT Ahmedabad held that addition under section 68 of the Income Tax Act towards unexplained cash credit unjustified as source of cash deposit on account of sale of petrol, diesel and other petroleum products duly proved.
Facts- The assessee is a Company engaged in the business of Trading in Petroleum Products and dealer of Reliance Industries Ltd. trading of Petrol and Diesel and other related products. The return of the assessee was processed u/s. 143(1) and then taken for scrutiny assessment.
During demonetization period i.e. 09.11.2016 to 31.12.2016, the assessee deposited Specified Bank Notes (SBN) of (Denomination of Rs. 500 & Rs. 1000) in the Co-operative Bank of Rajkot Ltd. of Rs. 1,24,59,500/-. AO noticed that the cash deposit made during the demonetization period was much higher than during the normal period. Therefore the A.O. relied on Notification dated 08.11.2016 issued by Department of Economic Affairs, Ministry of Finance, Government of India that the petrol pump was operated by the assessee (namely Reliance Industries Ltd.) was not an authorized Public Sector Oil Marketing Company. During the demonetization period, the assessee ought not to have collected Specified Bank Notes, therefore the same was added as unexplained cash credit u/s. 68 of the Act and also initiated Penalty proceedings u/s. 271AAC of the Act.
Commissioner (Appeals) deleted the addition made by the Assessing Officer. Being aggrieved, revenue has preferred the present appeal.
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