No sec. 68 additions if cash sales made by assessee were duly supported with sales invoices: ITAT

Case Details: NECX (P.) Ltd. v. Income-tax Officer - [2022] 145 taxmann.com 232 (Hyderabad-Trib.)

Judiciary and Counsel Details

• • R.K. Panda, Accountant Member & K. Narasimha Chary, Judicial Member
  • Smt. Shilpa Maniyar, CA for the Appellant. 
  • A.P. Babu, DR for the Respondent.

Facts of the Case

Assessee-company engaged in the business of sale of IT products and providing AMC services with respect to computer hardware. The assessee filed its return of income under normal provisions of income tax as well as MAT provisions.

During the year, the assessee had made cash deposits of certain amount in his bank account. The Assessing Officer (AO) made additions under section 68 on account of the same on the ground that the source of the same was not explained by the assessee.

On appeal, the CIT(A) confirmed the additions made by AO. Aggrieved-assessee preferred an appeal to the Hyderabad Tribunal.

ITAT Held

The Tribunal held that the assessee had not filed any details before the AO but the invoice-wise details on which cash was received were furnished by the assessee before the Tribunal. It was noticed that the invoices were reconciling the cash deposited in the bank account.

Since the turnover of the assessee was admitted and not disputed by the AO, the invoices being part of the undisputed sales, the additions made in respect of cash deposits are not justified.

Therefore, the appeal of the assessee was allowed, and accordingly, the additions made by the AO were to be deleted.