The Tribunal observed that the cash sales transaction was recorded in regular books of accounts and sales were made out of stock-in-trade. The assessee had also filed copies of sales invoice. The Ld. CIT (Appeals) had also observed that the Assessing Officer had treated the cash deposited in the bank during the demonetization period in demonetized currency as unexplained cash credit under section 68 although the nature and source of the cash deposits being proceeds arising out of cash sales was evident from the entries in the audited books of accounts of the assessee. The books of accounts of the assessee had been duly audited by an independent auditor. The cash sales and receipts were duly supported by relevant bills which were produced before the Assessing Officer. Tribunal was of the view that it cannot be said that the figures of sales and purchases were not supported by the quantitative details. Neither the Assessing Officer had made any enquiry in respect of the material supplied by the assessee nor the Assessing Officer had brought any material on record to establish that the sales bills were bogus.

Consequently, the Tribunal held that the Assessing Officer was not justified in making an addition under section 68. (AY. 2017-18)