New Saha Dyers And Processors Vs DCIT (ITAT Kolkata)
Demonetisation Cash Deposits Explained from Books: ITAT Deletes Section 68 Addition Despite ITS Mismatch
The Kolkata Bench of the ITAT dealt with an appeal arising from addition made on account of cash deposits during the demonetisation period for AY 2017-18. The Assessing Officer had treated cash deposits as unexplained under section 68, relying primarily on ITS data, initially making an addition of about ₹1.48 crore, while the CIT(A) enhanced the addition to ₹3.45 crore based solely on ITS figures.
Before the Tribunal, the assessee demonstrated, with cash book, stock register, and comparative charts of earlier and subsequent years, that the cash deposits during demonetisation were fully sourced from recorded cash sales and were consistent with past business patterns. It was shown that there was no abnormal spike, no defect found in books, and the deposits were duly reflected in the regular cash book. The Tribunal also noted that the reliance on certain ledger extracts by the Revenue did not establish any manipulation, as similar entries existed in non-demonetisation periods as well.
Holding that ITS data by itself cannot override regularly maintained books of account, and that no defect had been pointed out in the cash book or stock records, the ITAT concluded that both the original addition and the enhancement by CIT(A) were unsustainable. Accordingly, the entire addition was deleted on merits, and the assessee’s appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
