If the Assessing Officer found that the assessee is having cash sales in his profit & loss account or the amount is credited to the account, then for just verification purposes the Assessing Officer may ask for details for the same. The burden is on the Assessee to prove that the amount credited is from cash sales below the limit mentioned in the provisions. The applicability of provisions of section 269ST is depend on the transactions done by the Assessee.
For e.g. If the assessee sells goods to the party of Rs.3,00,000 through different bills and cash is received in a day of Rs.3,00,000 then section 269ST is violated. If Assessee sells goods to the party of Rs.3.5 lakhs through two bills of Rs.1.75 lakh each and cash is received on different days in respect of each bill then section 269ST is not violated. In PCIT v. J.M.J. Essential Oil Company [2023] 148 taxmann.com 447 (Himachal Pradesh) ( HC) where the assessee-company had failed to establish the genuineness of unaccounted income found in the garb of cash sales in its accounts during scrutiny assessment and there was sufficient material on record to show that cash sales were fabricated, impugned additions and penalty levied under section 271(1)(c) could not have been deleted by Tribunal merely because sales tax authorities had accepted books of account and VAT was paid on such cash sales. SLP of the assessee is dismissed .M.J. Essential Oil Company v .CIT [2023] 148 taxmann.com 448 (SC)