2025 (8) TMI 617

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....f the appeal before it against the order dated nil passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') by the ITO, Ward-50(1), Delhi (hereinafter referred to as the Ld. AO). 2. On hearing both the sides, we find that in the case of the assessee, for the reason of abnormal increase in cash sales and cash deposit during demonetization period, the assessment was initiated. The assessee, during the year, was engaged in distribution of jewellery. The AO has questioned the deposits of cash in the demonetized currency and made the addition of Rs. 75 lakhs u/s 68 which have been sustained by the ld.CIT(A) and the relevant findings of the ld.CIT(A) in para 4 are reproduced below:- "4. I have carefully exa....

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....rs of 08/11/2016. It is to be further noted that the appellant himself during the proceeding offered to admit 15% of the cash deposits as unexplained cash and considering the test of human probability i.e., the impossibility of making such a huge sale within a short span of time in the night hours of 08/11/2016, the assessing officer has estimated the unexplained cash at higher rate of 30% of the total cash deposits. In addition to the above, I have to note that the claim of cash sales has been made without having any identification of customers and the appellant had reason for excuse that cash sales below Rs. 2,00,000 doesn't have mandate to have PAN & Identity of customers and it was also impossible to collect the same due to heavy ru....

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.... by treating 30% of cash deposited generated out of cash sales as unexplained without rejecting books of accounts or without confronting to the assessee the "defects" in the books of accounts and "material or evidence or the basis of estimations". In the present case, the Ld. A.O. without rejecting books of accounts or pointing out any specific defect considered a part of trading receipt as unexplained under section 68. 2. That the addition made being the cash receipts represent the sales were already been offered to taxation, therefore, making addition u/s 68 of the Act has resulted in double taxation on the assessee. 3. That the Ld. A.O. grossly erred in making addition as all the cash sales are duly supported by the aud....