Nisheeth Bansal Vs ACIT (ITAT Delhi)
Books audited, Sales accepted- No Double Tax on Cash Sales – Cash Sales Duly Recorded in Books cannot be taxed again u/s 68-Assessee’s explanation remained Unrebutted -ITAT quashes Demonetisation cash deposit addition
Delhi ITAT deleted an addition of ₹25,47,890 made on account of alleged unexplained cash deposits during the demonetisation period, holding that once cash sales are duly recorded in audited books & accepted by the Dept, the proceeds thereof cannot be taxed again u/s 68.
Assessee, engaged in the business of paper trading, also earned salary from a partnership firm & income from property. For AY 2017-18, he filed audited books of accounts showing total sales of ₹2.28 crore, which included cash sales of ₹25.47 lakh in October & November 2016. During demonetisation, these sale proceeds were deposited into his bank a/ct.
AO observed substantial deposits of ₹18 lakh in November 2016 & ₹16 lakh in December 2016, with negligible deposits in other months. Pointing to the alleged mismatch between deposits & reported cash sales & the absence of a uniform deposit pattern, AO treated ₹25.47 lakh as unexplained cash credits u/s 68 & invoked sec 115BBE. CIT(A) confirmed the addition.
Before the Tribunal, Assessee contended that the deposits came from genuine cash sales & earlier bank withdrawals. The higher sales in October–November were explained by the Diwali festival season, which traditionally sees a spike in demand . All sales were duly recorded in the books, supported by VAT returns accepted by VAT authorities & sample invoices were furnished. It was argued that AO had not pointed out any defect in the books or rejected them & once the sales are accepted & profits taxed, the cash deposits from those sales cannot be treated as unexplained income.
