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ITAT Agra: Cash Sales Cannot Be Added Under Section 68 Without Rejecting Books

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Summary

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  • The ITAT Agra has deleted a Rs.33,00,923 addition made under Section 68 concerning cash deposits during the demonetisation period.
  • The Tribunal found that the cash sales were duly recorded in the audited books of M/s R.P.J. Jewellers, with no defects identified by the Assessing Officer.
  • It emphasized that Section 68 applies to unexplained cash credits and cannot be applied to legitimate sales already recorded in financial statements.
  • This ruling reinforces that suspicion alone cannot justify tax additions when proper documentation exists, potentially impacting future assessments of similar cases.

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