Case Number: ITA 2433/DEL/2022
Appellant: DCIT, Central Circle-29, New Delhi
Respondent: Bhanu Infrabuild Pvt. Ltd., New Delhi
Assessment Year: 2017-18
Case Filed on: September 30, 2022
Order Type: Final Tribunal Order
Date of Order: August 18, 2023
Pronounced on: August 18, 2023
This case revolves around the appeal filed by the Deputy Commissioner of Income Tax, Central Circle-29, against the decision made by CIT(A)-31 regarding cash handling discrepancies alleged in the financial dealings of Bhanu Infrabuild Pvt. Ltd. for the assessment year 2017-18.
The issue at hand stems from the impounded documents seized from the premises of M/s Omaxe Limited, which suggested discrepancies in the cash handling by Bhanu Infrabuild. The primary contention was about the cash-in-hand recorded just before the demonetization period and the substantial cash deposits made thereafter.
The Revenue argued that the cash balances reported were inconsistent with the company’s usual business transactions and that there was no pattern of such large cash deposits in the previous year. Additionally, the Revenue contested that the documents containing cash balances at the site offices lacked verifiable supporting documentation.
The Tribunal noted that the CIT(A) had adequately addressed the concerns raised by examining the cash books and bank statements, providing a detailed comparison of cash transactions before and after the demonetization period. It was found that the cash balances had been legitimately maintained and could be traced back to legitimate withdrawals and business activities, refuting the allegations of unaccounted cash handling.
The Tribunal’s decision highlighted the importance of maintaining comprehensive and transparent financial records, which Bhanu Infrabuild Pvt. Ltd. demonstrated effectively. The ruling also emphasized that the business prudence in maintaining cash reserves, as dictated by the operational needs of a company, should not be challenged without substantial evidence to the contrary.
The decision to dismiss the Revenue’s appeal supports the stance that proper documentation and adherence to accounting practices can effectively defend against claims of improper financial handling.
The case is a critical reference for companies on the importance of financial diligence and for tax authorities in assessing the legitimacy of business transactions based on factual evidence rather than assumptions.
The order was pronounced in the open court, signifying a transparent judicial process and the detailed examination of all evidence presented.5>
DCIT Central Circle-29 vs. Bhanu Infrabuild Pvt. Ltd.: Cash Handling Dispute for AY 2017-18
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