Income Tax Appellate Tribunal - Delhi
Dileep Kumar Jha,Delhi vs Ito,Ward-59(1), Delhi on 8 April, 2025
ITA No.366/Del/2025
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI "SMC" BENCH: NEW DELHI
BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER
ITA No.366/Del/2025
[Assessment Year : 2017-18]
Dileep Kumar Jha vs ITO
B-167, Block A, Budha Marg Ward-59(1)
Mandawali, East Delhi Delhi
Delhi-110092.
PAN-ARGPJ8390M
APPELLANT RESPONDENT
Appellant by Ms. Uma Upadhyay, CA &
Shri Aditya Garg, AR
Respondent by Shri Sanjay Kumar, Sr. DR
Date of Hearing 08.04.2025
Date of Pronouncement 08.04.2025
ORDER
PER PRADIP KUMAR KEDIA, AM :
The captioned appeal has been filed at the instance of the assessee seeking to assail the First Appellate order dated 10.01.2025 passed by Commissioner of Income Tax (A)/ADDL/JCIT(A)-2, Mumbai ["CIT(A)"] under s. 250 of the Income Tax Act, 1961 ["the Act"] arising from the assessment order dated 16.12.2019 passed under s. 143(3) of the Act relevant to assessment year 2017-18.
2. As per the captioned appeal, the assessee has challenged the additions of INR 9,39,055/- made by the AO on account of cash deposits under s. 68 r.w.s 115BBE of the Act.
3. When the matter was called for hearing, the Ld. Counsel for the assessee submitted at the outset that the assessee is engaged in the business of wholesale and retail distribution of confectionary, bakery products including Parle-G. The Ld. Counsel for the assessee adverted to a tabulated statement for the FYs 2015-16 & 2016-17 to demonstrate the pattern of business and the Page | 1 ITA No.366/Del/2025 corresponding cash deposits on a regular basis month after month. As per the tabular statement, the Ld. Counsel contended that the assessee has reconciled the opening stock, cash sales and corresponding cash deposits month after month. The Ld. Counsel next submitted that the assessee made cash deposits of INR 27,38,410/- in aggregate during demonetization period. The aforesaid cash deposits comprises of deposits of new currency notes to the extent of INR 16,50,910/- and deposits of old currency notes to the extent of INR 10,57,500/-. The AO ignored such facts and nature of business, has made an addition of INR 9,39,055/- after giving a meager relief to the extent of INR 1,17,945/- being opening balance as on 08.11.2016.
4. In this backdrop, the Ld. Counsel submits that it is not a case where the old currency notes have been deposited without any pattern. In the present case, definite pattern of cash sales and cash deposits are available on record which the AO and the CIT(A) have failed to appreciate in right perspective. The nature of business of the assessee is such where most of the sales are carried out in cash. During demonetization period, the assessee continued to sale the confectionary items and reluctantly accepted the old currency notes which, in turn, were deposited in the bank account. The Ld. Counsel for the assessee thus submitted that when the facts are seen in perspective in a holistic manner and having regard to stock tally and cash sales, the source of cash deposits stand fully explained. The Ld. Counsel also submitted in the alternative that for cash deposits in bank account, s.68 invoked by the AO has no application. The Ld. Counsel for the assessee thus urged for suitable relief.
5. Per contra, the Ld. Sr. DR for the Revenue relied upon the assessment order and the first appellate order.
6. I have carefully considered the rival submissions. The assessee, to my mind, has sufficiently demonstrated s systematic pattern of business where cash sales are carried out and corresponding cash deposits are made month after month which, in turn, is utilized for purchase of confectionary items for sale. The deposits made during the demonetization period, in the facts of the Page | 2 ITA No.366/Del/2025 present case, bears no unusual or abnormal feature when compared with the past actions of the assessee. Significantly, the AO has accepted the cash sales but has refused to accept the source of cash deposits. Such approach carry inherent folly and cannot be countenanced in law. When the facts are seen in totality and in its perspective, the explanation adduced on behalf of the assessee cannot be tarred as insufficient. I have thus no hesitation to reverse the additions so made by the Revenue. The order of the CIT(A) is thus set aside and the AO is directed to delete the additions made on this score.
7. In the result, the appeal of the assessee is allowed.
Order dictated and pronounced in the open Court on 08 th April, 2025.
Sd/-
(PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER *Amit Kumar, Sr.P.S* Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Page | 3