Cash sales during demonetisation already reported as sales, cannot be taxed twice as unexplained credit: ITAT Delhi




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Cash sales during demonetisation already reported as sales, cannot be taxed twice as unexplained credit: ITAT Delhi

 

Harisons Diamonds Pvt Ltd Vs ACIT (ITAT Delhi) Appeal Number : ITA No. 1426/DEL/2021

Facts:

  1. An addition was made on account of cash sales amounting to Rs. 3,25,52,833/- made during the period 01.10.2016 to 08.11.2016 held to be unexplained credit u/s 68 r.w.s 115BBE of the Income-tax Act.
  1. Notably, during the course of the assessment proceedings, AO was of the firm belief that there was an abnormal increase in the percentage of cash sales during the period 01.10.2016 to 08.11 2016. Further, sales did not have the name of the purchaser and PAN.
  1. Cash sales from 01.10.2016 to 08.11.2016 amounting to Rs. 4,73,58,629/- was added as unexplained cash credit u/s 68 of the Act and accordingly, added to the income of the assessee. On appeal, CIT(A) directed AO to restrict the addition to Rs. 3,25,52,833/-.
  1. The assessee also maintained that since, sales made were duly disclosed in VAT return and also in books of accounts maintained by the appellant audited under the Companies Act, 2013 and also under section 44AB of the Act and relevant income tax was paid on the same no adverse inference could be drawn in respect of the declared sales by the appellant company.

ITAT Delhi held as below:

  1. The assessee is not required to keep the names of purchasers for cash sales less than Rs. 2 lakhs and not even one instance has been pointed out by the Assessing Officer where cash sales were more than Rs. 2 lakhs.
  1. The most peculiar fact is that on 23.12.2016, a survey operation u/s 133A of the Act was carried out at the business premises of the assessee company and not a single defect/discrepancy was found in the physical stock vis a vis book stock of the assessee.
  1. Moreover, the cash sales have already been offered as income, the same cannot be taxed in the garb of inflation sales to cover up demonetization currency.
  1. Therefore, considering the totality of facts, we direct the Assessing Officer to delete the addition of Rs. 4,73,58,629/-.

 

The copy of the order is as under:

1708675456-1426...Harisons Diamonds...a..2012..




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