2026 (6) TMI 1459

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....s proposed the following substantial questions of law arising out of the judgment and order dated 07.03.2025 passed by the Income Tax Appellate Tribunal, "B" Bench, Ahmedabad (For Short "the Tribunal") in ITA No. 63/Ahd/2024 for Assessment Year 2017-18 : (a) Whether in the facts and circumstances of the case and in law, the learned ITAT has erred in deleting the addition of Rs. 5,61,85,000/- made on account of unexplained money under Section 69A of the Income Tax Act, 1961 without appreciating the findings of the Assessing Officer that the assessee has misused the provision of Rule 14B of the Income Tax Rules, 1962 for routing its own unaccounted money in cash in the garb of claiming bogus sales and purchases ? (b) Whether....

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....o considered the contention of the assessee that the entire cash deposits were from legitimate cash sales made on 08.11.2016, the day on which demonetization was announced as large number of customers rushed to the jewellery showrooms from 08:30 pm onwards to purchase gold jewellery using the demonetized currency notes which remained valid until midnight. 3.3. The assessee also explained that due to the overwhelming crowd, both the showrooms of the assessee operated at full capacity with all staff and additional helpers managing the influx of customers and it was emphasized that there was no space to stand in the shop. The assessee therefore, explained that large number of customers entered into showroom within a short span of 4 to 5 hou....

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....genuineness of the sale or conduct any independent verification, making the addition purely based on suspicion. The judicial precedents relied upon by the CIT (A), support the assessee's case, as they establish that cash sales, if duly recorded and disclosed, cannot be treated as unexplained income. 8.7. In light of the above, we hold that CIT (A) was justified in deleting the addition of Rs. 5,61,85,000/- under Section 69A of the Act, as the assessee had duly recorded these sales in its books and provided extensive documentation to support them. The AO failed to disprove the assessee's submissions or conduct any inquiry to verify the genuineness of the transactions. The Revenue has not brought any material evidence to counter the ....