TaxTMI 
TaxTMI 
2026 (6) TMI 279
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....ed 28.12.2019 under section 143(3) of the Act. 2. That the Id. CIT(A) erred on facts and on law in upholding the addition of Rs. 6,34,53,500/- made by AO holding the cash deposits made by the appellant in the bank account during demonetisation period as unexplained credit under section 68 of the Act, despite the fact that the said sum pertained to cash sales made by the appellant in the regular course of business during the relevant year. 2.1 That the learned CIT(A) erred in law and on facts in disbelieving the appellant's sales during October and November solely on the ground that they constituted 95% of the total turnover, without appreciating that the appellant is engaged in the jewellery business, wherein high value sales are customary during the festive period of Diwali and Dhanteras. 2.2. That the ld. CIT(A) erred in law and on facts in rejecting the appellant's sales for the months of October and November on the ground of non-submission of comparative figures, without appreciating that the relevant year was the appellant's first year of full-scale operations. 2.3. That the Id. CIT(A) erred in law and on facts in disbelieving th....
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....amounting to Rs. 6,34,53,500, and had appropriately filed the corresponding VAT returns for the sale and purchase transactions. 3. That the Id. CIT(A) erred in law and on the facts of the case in upholding the addition of Rs. 60.00,000/- made by AO treating share application money received from Jyotigamya Advisory Private Limited (JAPL) as unexplained cash credit under section 68 of the Act and doubted the genuineness of the transaction on the ground that the appellant failed to allot the shares against the said application money, despite the fact that the said amount was duly paid through proper banking channels. 3.1 That the ld. CIT(A) erred in upholding the said addition on the ground of non fulfilment of procedural requirements of allotment of shares within in the prescribed period under the Companies Act, 2013, while ignoring the fact that the appellant had duly discharged its onus under section 68 of the Act by furnishing confirmation from JAPL along with supporting documents such as PAN, bank statements, and audited financials, thereby establishing the identity, genuineness, and creditworthiness of the investor. 4. That the ld. CIT(A) and AO erred ....
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.... permissible. 5. The ld. DR placed reliance upon the orders of the lower authorities. 6. We have heard the rival submissions in the light of material available on record. We have noted that this Tribunal has been consistently holding that where, the trading result of the assessee have been accepted by the Revenue, books of accounts have not been rejected, no addition is permissible. Thus, we have noted that in the case of DCIT vs Adarsh Kanch Udyog P. Ltd. in ITA No.4741/Del/2024, dated 21.03.2025, it has been held "...4. The Ld. CIT(A) has rightly held that the books of accounts of appellant have not been rejected and the purchases stand accepted. We find sufficient force in the argument that corresponding sales cannot be suspected. We also find force in the argument that assessee's VAT orders for F.Y 2016-17 also support his case of genuine sales having undertaken. Accordingly, we are of the considered view that there is no case for any interference to the order of the Ld. CIT(A) at this stage. The same is, therefore, confirmed and all the grounds of appeal raised by the revenue are dismissed..." 7. Again in ITA No.3520/Del/2024 in the case of ITO vs MOBI TRADEL....
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....y stated that the sales made by the assessee had been duly disclosed in the audited books of accounts and also in the income tax return. The assessee had sufficient cash balance to explain the cash deposits and hence nothing could be treated as unexplained there on. The learned AO however disbelieved the entire contentions and observed that similar cash deposits were not made by the assessee in the earlier year. The assessee to buttress this argument submitted that the business itself was started only in October 2016 and hence the same is not comparable with that of the earlier year. The assessee specifically stated that the retail showroom in Delhi started in October 2016. This showroom was taken on rent from Mrs. Rajini Apan from July 2016, post which showroom fit outs took 3 to 4 months and the assessee being a new showroom, lot of retail sales took place during the months of October to 8th November 2016. The assessee also submitted the complete copies of sale bills, cash book, VAT returns (both original and revised) and purchase invoices. The assessee also submitted that it had sufficient stocks in its kitty as is evident from the stock register and to the extent of sales, the ....
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....ated 19-11-2024 had categorically held that enhanced rate of tax at 60% as provided in section 115BBE of the Act could be made applicable only from Assessment Year 2018-19 onwards and cannot be applied for earlier years. Hence we hold that cash deposits made by the assessee is duly explained and no addition is warranted thereon. Accordingly, the grounds raised by the assessee are allowed..." 9. We have noted that the facts of the present case are akin to those deliberated in judicial precedents above. Accordingly, in respectful compliance to the decision of Co-ordinate Benches of this Tribunal as well as for the purposes of consistency, we are of the view that no case for any addition is made out in the hands of the assessee. Accordingly, we set-aside the order of the ld. CIT(A) and direct the ld. AO to delete the addition of Rs. 6,34,53,500/- u/s 68 of the Act. The appellant succeeds on this issue. 10. The next issue is regarding an addition of Rs. 60 lakhs made by the ld. AO again u/s 68 of the Act on account of share application money. As per brief factual matrix, the assessee had received share application money of Rs. 60 lakhs, which was pending allotment. During the yea....