Shivansh Dairy Products Private Limited Vs ITO (ITAT Delhi)
Conjectures Can’t Defeat Calculation – ITAT Deletes Entire 68 Addition
Assessee, engaged in the dairy business, filed its return declaring income of ₹6,16,930. The case was selected for scrutiny due to “abnormal increase in cash deposits during demonetisation”. Assessee had deposited ₹48,48,186 in old currency between 09.11.2016 and 31.12.2016.
To justify the source, Assessee submitted cash sales details, month-wise sales & purchase charts, stock statements, and VAT returns. However, AO alleged:
- Stock position was negative post-demonetisation.
- Sales invoices were issued without customer name/address even above ₹25,000.
- Purchases were not fully supported with PAN/address of suppliers.
AO concluded that sales were not genuine, treated the entire cash deposit as unexplained cash credit u/s 68, and taxed it u/s 115BBE.
Before CIT(A), Assessee submitted audited books, VAT returns, purchase & sales bills, bank statements, and a corrected stock chart including Gross Profit & direct expenses to prove that sufficient stock was available to make cash sales. Assessee argued that the AO computed stock incorrectly by ignoring gross profit element in the trading account. However, CIT(A) upheld the addition, stating that no proper evidence was furnished.
ITAT’s Key Findings:
AO’s stock calculation was fundamentally wrong.
