Case Law Details
Jet Freight Logistics Limited Vs CIT Appeal (NFAC) (ITAT Mumbai)
It is evident that assessee is in continuous need for payment of cash at various point of time and hence, assessee had to withdraw cash in order to satisfy its business requirements. Moreover, the assessee has got 9 branches all over India and such cash requirement would have to be met for meeting day to day expenditure. We find from the perusal of the bank statements for the whole year and the cash book for the whole year which is already forming part of records, the assessee has regularly withdrawn cash from its bank account throughout the year and has been making deposits in bank throughout the year in the bank account. Since remaining balance of the amounts withdrawn from bank after meeting its business expenses that were lying with the assessee had lost its validity of being classified as a legal tender pursuant to announcement of demonetisation policy by the Government of India, the assessee had no choice but to deposit the cash available with it both in the form of cash surplus withdrawals and also the cash received from customers in the designated bank account in Specified Bank Notes during the period 09/11/2016 to 31/12/2016. All cash that has been deposited in Specified Bank Notes during the demonetisation period i.e.09/11/2016 to 31/12/2016 cannot be classified as unexplained income of the assessee. What is to be seen is as to whether the assessee had sufficient cash balance in its books for making the said deposits in the bank account. In the instant case, we find that assessee had sufficient cash balance in its books which is evident from the cash book filed by the ld. AR before us. From the perusal of the said cash book, we find that there is no negative cash balance on any day during previous year much less prior to the demonetisation period.
We further find that assessee had furnished the entire details of cash received from customers containing the name and address of the customers, PAN, invoice amount, invoice details, ledger confirmation etc., before the lower authorities and further had submitted that the cash has been received from 20 parties by the assessee during the year. Out of these parties, 11 parties were selected by the ld. AO for verifying the genuineness of the transaction. Three parties directly appeared before the ld. AO and filed the replies. Eight parties furnished the replies to the assessee and those replies were also submitted by the assessee before the ld. AO. These facts were not controverted by the Revenue before us by bringing any contrary evidences. The ld. AO had not brought any cogent evidence on record to disbelieve the details furnished by the parties and the assessee. Moreover, the banks had fixed the maximum limit of making deposit in cash up to Rs.5,00,000/- in a day during the demonetization period commencing from 09/11/2016 to 31/12/2016. This had mandated the assessee to make frequent cash deposits less than Rs. 5,00,000/- during the period 09/11/2016 to 31/12/2016. Accordingly, we hold that the entire cash deposits made by the assessee during the period 09/11/2016 to 31/12/2016 in Specified Bank Notes in the sum of Rs. 2,48,87,000 stood properly explained by the availability of cash balance in its books and hence, no addition thereon could be made u/s.68 of the Act. We direct the ld. AO to delete the said addition.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal in ITA No.683/Mum/2022 for A.Y. 2017-18 arises out of the order by the ld. Commissioner of Income Tax (Appeals) NFAC in appeal No.CIT(A) 17, Mumbai/10357/2019-20 dated 24/11/2021 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 29/12/2019 by the ld. Asst. Commissioner of Income Tax, Circle 10(2)(1), Mumbai (hereinafter referred to as ld. AO).
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