March 2023
S.68 read with S.153A –When cash deposited post-demonetization by assessee was out of cash sales which had been accepted by Sales Tax/VAT Department and not doubted by the AO and when there was sufficient stock available with the assessee to make cash sales then the said fact was sufficient to explain the deposit of cash in the bank account and could not have been treated as undisclosed income of assessee and accordingly, impugned addition made by the AO was not justified.
By Jagdish Punjabi, Chartered Accountant
Devendra Jain, Advocate
Reading Time 7 mins
63 Smt. Charu Aggarwal
[2022] 96 ITR(T) 66 (Chandigarh – Trib.)
ITA No.:310 & 311 (CHD.) OF 2021
A.Y.: 2017-18
Date of order: 25th March, 2022
S.68 read with S.153A –When cash deposited post-demonetization by assessee was out of cash sales which had been accepted by Sales Tax/VAT Department and not doubted by the AO and when there was sufficient stock available with the assessee to make cash sales then the said fact was sufficient to explain the deposit of cash in the bank account and could not have been treated as undisclosed income of assessee and accordingly, impugned addition made by the AO was not justified.
FACTS-I
The assessee was a limited liability partnership engaged in the business of resale of jewellery, diamond and other related items. A search operation was conducted in the K group of cases. Notice under section 153A was issued to the assessee and in response to the notice, the assessee filed its return of income declaring an income of Rs. 22.53 lakhs.
During the course of assessment proceedings the AO observed that the assessee had deposited Rs. 2.90 crores post-demonetization in its account and that during the course of search, books of account and sales bill books relating to the demonetization period and pre-demonetization period were verified which revea
