Anand Mulky Vs ITO (ITAT Bangalore)
Turnover Accepted, Receipts Cannot Be Taxed Again– Demonetisation Deposits from Sundry Debtors -Double Taxation Not Permitted- 68 Addition Struck Down
Bangalore dealt with addition of cash deposits made during demonetisation. Assessee, engaged in retail trading of Samsung mobile phones & SIM cards, filed his return for AY 2017-18 declaring income of ₹18.46 lakh. During scrutiny, AO noticed cash deposits of ₹8,89,878 in specified bank notes on 10.11.2016 & 15.11.2016. Out of this, ₹2,26,255 was accepted as explained opening balance, while the balance of ₹6,63,000 was treated as unexplained cash credit u/s 68 & taxed under s.115BBE. CIT(A) upheld the view partly, leading to the appeal before Tribunal.
Assessee argued that his business involved daily cash collections from small retailers through field staff, which were deposited into the bank on the following day. The impugned deposits were nothing but sales proceeds collected from sundry debtors, duly recorded in books of account. It was further pointed out that AO had already accepted the turnover of ₹55.14 crore along with books & financials. Therefore, taxing part of the same recorded sales again u/s 68 amounted to double taxation.
Tribunal noted that the deposits of ₹7,05,178, ₹51,000 & ₹1,33,700 were properly explained as collections from sundry debtors. Once the turnover & profit as per P&L were accepted by AO, there was no scope to treat the same receipts as unexplained. Tribunal held that provisions of u/s.68 apply only where no source is explained. Here, the source was regular business sales already forming part of turnover. The addition made by AO resulted in impermissible double taxation.
