Case Law Details
ITO Vs Manasa Medicals (ITAT Bangalore)
ITAT Bangalore held that cash deposited on account of cash sales during demonetization period cannot be added as unexplained under section 68 of the Income Tax Act as AO didn’t rejected the books of accounts nor brough anything contrary on records to show that cash sales is not the source for cash deposit.
Facts-
The case of the assessee was selected for scrutiny for the purpose of verification of “large value of cash deposits during demonetization” and accordingly notices were issued to the assessee. After verification of the details submitted by the assessee, the AO proposed to make an addition u/s. 68 of the Act as unexplained cash towards cash deposits made during the demonetization period.
The AO did not accept the submissions of the assessee and proceeded to treat the cash deposits in the bank accounts out of cash sale as unexplained credit u/s. 68 and levied tax as per the provisions of section 115BBE of the Act. Aggrieved, the assessee preferred an appeal before the CIT(A). CIT(A) accepted the contentions and allowed the appeal. Being aggrieved, revenue has preferred the present appeal.
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