ASHISH BHARGAVA,JAIPUR V. DCIT, JAIPUR

ITA 875/JPR/2025

AI Insights

The case revolves around the appeal by Ashish Bhargava against the order of the CIT(A), which confirmed the addition of Rs. 1,26,72,500 as unexplained cash credit under Section 68 of the Income Tax Act, 1961, and the application of a 60% tax rate under Section 115BBE. The addition was based on the cash deposits made during the demonetization period, which the Assessing Officer (AO) deemed as unexplained. The Tribunal examined the sales records, VAT returns, and the books of accounts maintained by the assessee, and found no defects or discrepancies that would justify the additions made by the lower authorities.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775673 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Appeal Filed On: 29-05-2025
• Other Referred Cases: ACIT Vs Ashish Bansal, ACIT Vs Baldev Raj Charla, PCIT Vs Singhal Exim Pvt. Ltd, Dinesh Kumar Soni Vs DCIT, Abhilasha Jain Vs DCIT, Abhishek Prakashchand Chhajed Vs ITO, Sanjay Godha Vs ACIT, Kishore Jeram Bhai Khaniya Vs ITO, CIT Vs Devi Prasad Vishwnath Prasad, CIT Vs Singhal Exim Pvt. Ltd
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHARAM SINGH MEENA
• Assessee Lawyers: VINOK KUMAR GUPTA
• Keywords: Set aside; Business income; Corroborative evidences; Unexplained cash credit; Bogus purchase; Onus to prove; Assessment record; Bogus
• Section: 143(3); 142(1); 68; 69C; 139; 260A

Judgement Text

"vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh xxu xks;y] ys[kk lnL;] ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI GAGAN GOYAL, AM vk;dj vihy la-@ITA No. 875/JPR/2025 fu/kZkj.k o\"kZ@Assessment Year : 2017-18 Ashish Bhargava D-92, Krishna Marg, Amba Bari, Jaipur. cuke Vs. The DCIT, Circle-4, Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No. AEPPB8644E vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by : Shri Vinok Kumar Gupta, C.A.. jktLo dh vksj ls@Revenue by : Shri Dharam Singh Meena, JCIT lquokbZ dh rkjh[k@Date of Hearing: 14/08/2025 ?kks\"k.kk dh rkjh[k@Date of Pronouncement: 08/09/2025 vkns'k@ORDER PER DR. S. SEETHALAKSHMI, J.M. This appeal by assessee is directed against order of ld. CIT(A), National faceless Appeal Centre, Delhi dated 20.05.2025 for the assessment year 2017-18, which in turn arise from the order dated 27.12.2019 passes under section 143(3) of the Income Tax Act, [hereinafter referred as “Act”] by the AO. 2. The assessee has raised following grounds: “1. The Ld. CIT(A) has erred in law as well as on the facts of the case in confirming the action of Ld.AO of initiating the assessment proceeding u/s 143(3) of the Income Tax Printed from counselvise.com 2 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. Act. The very action taken u/s 143(3) of the act, is bad in law and without jurisdiction. Hence, the same kindly be quashed. 2. The Ld. CIT(A) erred in law as well as on the facts of the case in confirming the action of Ld.AO of making addition u/s 68 of the Act, despite impliedly rejecting books of accounts u/s 145(3). The addition so made is wrong in law as well as on the facts of the case. Hence, the same kindly be quashed. 3. The Ld. CIT(A) erred in confirming the action of Ld.AO in making addition of Rs. 1,26,72,500/- despite accepting the declared turnover and at the same time treating the cash sale to the extent of Rs. 1,26,72,500/- as bogus. Hence, the addition so made has resulted in double taxation in case of the assessee and is unjustified, excessive and illegal, and may kindly be deleted. 4. Alternatively, and without prejudice to anything stated above, the Ld. CIT(A) has erred in law as well as on the facts of the case by confirming the action of Ld.AO in not reducing the GP in respect of sale of Rs.1,26,72,500/-, which was alleged to be bogus. 5. The Ld. CIT(A) has erred in confirming the action of Ld.AO in concluding that the appellant has not discharged the onus of proving genuineness of cash deposit, without appreciating the submission made by the appellant. 6. The Ld. CIT(A) has erred in law as well as on the facts of the case by confirming the action of Ld. AO in invoking Sec 115BBE, which is contrary to provisions of law as well as facts of the case. 7. That the appellant craves your indulgence to add, amend or alter all or any grounds of appeal before or at the time of hearing.” 3. The brief facts of the case are that the assessee is an individual and is sole proprietor of Subransu Sales and engaged in the business of trading of cameras, memory cards, computer printers and accessories of cameras. The assessee has filed his return of income u/s. 139 of the Act on 30.10.2017 declaring total income of Rs. 13,30,540. Subsequently, the case of the assessee was selected for compete scrutiny time for the reason that huge cash was deposited during demonetization. Post this, notices u/s 143(2) and 142(1) of the Act were issued. The assessee submitted his reply and furnished the required documents. Thereafter, show cause Printed from counselvise.com 3 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. notices were issued on 04.12.2019 and 19.12.2019 to the assessee. the assessee filed his reply, to these notices, through ITBA portal. 4. The ld. AO noted, during assessment proceedings that the assessee has deposited cash of Rs. 1,26,72,500/- in his Axis Bank a/c and submitted that the source of such cash is regular cash sales of the assessee but he failed to produce the documentary evidence of such sales and failed to discharge his onus to prove identity, genuineness and creditworthiness of the person to whom sales were made. Therefore, considering the facts, the total cash deposits of Rs. 1,26,72,500/- is treated as unexplained cash credit u/s 68 of the Act and is added to the total income of the assessee and further invoked the provision of section 115BBE of the Act. 5. Aggrieved from the order of AO, the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below: “7.0 DECISION 7.1 The grounds of appeal, copy of assessment order, submissions of the appellant, statement of facts and Form 35 have been carefully considered and adjudicated as under: 7.2 Ground Nos. 1.2 to 1.6 has been filed against the assessment of the cash deposit of Rs. 1,26,72,500/- during the demonetization period u/s 68 of the I.T. Act. During the demonetization period the appellant has made cash deposit of Rs.1,26,72,500/- and claimed that the source of cash deposit was from sale of cameras, memory cards, computer printers. The Assessing Officer has called for the month wise opening balance in cash, cash sales, cash deposited in bank and closing cash balance for the F.Y. 2015-16 Printed from counselvise.com 4 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. & 2016-17. The Assessing Officer has analysed the cash sales pattern and cash deposits pattern for the F.Y. 2015-16 & 2016-17 and find that huge variation is there in cash deposit pattern between the F.Y. 2015-16 &2016-17. Further, the Assessing Officer has observed that the appellant has not furnished the sales bills and the identity of the person to whom the sales was made. Therefore, the Assessing Officer has concluded that the source for cash deposit ofRs.1,26,72,500/- is not from sales and the same is from some other unexplained source, hence, the cash deposit of Rs.1,26,72,500/- is assessed u/s 68 of the I.T. Act. 7.3 During the course of appellant proceedings, the appellant has not furnished any new evidences which were not furnished before the Assessing Officer. The cash deposit details in the F.Y. 2015-16 are given as under: … The undersigned has analysed the cash deposit and cash balance pattern of the appellant for the F.Y. 2015-16 & 2016-17. During the F.Y. 2015-16, the appellant has deposited more than ninety percentage of cash in hand in every month whereas for F.Y. 2015-16 the cash deposit was less than ten percentage. The appellant has not given any valid reason that why the huge cash was accumulated from April 2016 to till demonetization period. If any requirement is there for the cash, the same might be utilized as cash expenditure or the same should be deposited in the bank. The appellant has claimed that the cash was kept as cash in hand without furnishing any valid reason for accumulating the cash. 7.4 Further, it is clear from the cash deposit pattern that the appellant has made cash deposit of Rs.1,63,11,200/- in the F.Y. 2016-17 out of which Rs.1,26,72,500/-pertains to demonetization period which is eighty percentage of the total cash deposit whereas the ratio for F.Y. 2015-16 for the same period is twenty six percentage only. The appellant has not explained the reason for sudden increase in cash sales of camera and its accessories during demonetization period. The appellant has not furnished the sales bill for the cash sale and identity of the person to whom the sales was made before the Assessing Officer as well as the undersigned also. The appellant has relied upon various case laws which are perused by the undersigned. The facts of those case laws, which are relied upon by appellant, are not relevant to assessee’s facts. 7.5 In view of the above mentioned facts and discussion, the appellant could not establish through documentary evidences that the source of the cash deposit made during the demonetization period was from sale of cameras and its accessories. The appellant could not give valid reason with documentary evidences for accumulating the huge cash from April 2016 to till demonetization period. Further, the appellant failed to prove the Printed from counselvise.com 5 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. identity, genuineness and creditworthiness of the cash deposits during the course of assessment proceedings as well as during the appellate proceeding also. Therefore, the Assessing Officer has correctly assessed the cash deposit made of Rs. 1,26,72,500/- during demonetization u/s 68 of the I.T. Act. Hence, Ground Nos. 1.2 to 1.6 are decided against the assessee and the assessment order is upheld. Ground No. 1.7 is general in nature. 8. Hence, the appeal of the assessee is dismissed.” 6. During the course of hearing, the ld. AR of the assessee has filed following written submission with the prayer to delete the addition so made by the AO and confirmed by the ld. CIT(A). 1. Appellant is a resident individual and deals in trading of cameras, memory cards, computer printers and accessories of cameras under the trade name \"SUBRANSU SALES\". 2. The Assessee e-filled his original return of income for the A.Y. 2017-18 on 30.10.2017 declaring therein total income of Rs.13,30,540/-. 3. Government of India demonetized notes in denomination of Rs.1000/- and Rs.500/- (Specified Banking Notes or SBN for short) with effect from 09-11-2016 and deposit of such SBNs in banks were permitted from 09-11-2016 to 31-12-2016. 4. Owning to demonetisation, the appellant deposited cash of Rs. 1,26,72,500/- in the bank account during demonetisation period (09-11-2016 to 31-12-2016). The source of cash deposited was: (i) Cash generated from cash sales made during the month of October 2016 and November (up to 8.11.2016) of Rs. 71,39,483/-, (54,52,591 + 16,86,892). Out of such cash sales Rs. 1,13,000 was already deposited in the month of October and Rs. 6,72,500/- in the month of November before 08.11.2016, and (ii) Opening cash balance of Rs. 63,06,166/- as on 30.9.2016 that was also generated through cash sales, not deposited up to the 30.9.2016. 5. Case of the appellant was selected for scrutiny and notice u/s 143(2) of the Act was issued on 10.08.2018. Subsequently for verification of source of cash deposited Rs. 1,26,72,500/-, during demonetization period, notice u/s 142(1) was issued on various dates. Appellant complied with the notice and submitted the response to substantiate source of cash. Printed from counselvise.com 6 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. 6. However, the Ld. AO has deduced on the premises of his own presumptions and without comparison of excel sheets and comparative charts that the cash deposit of Rs. 1,26,72,500/-, in the bank account, is unexplained and out of undisclosed source of income and made an addition of Rs. 1,26,72,500, u/s 68 r.w.s. 115BBE of the Act, vide his order u/s 143(3), dated 27.12.2019 and assessed the total income at Rs. 1,40,03,040/-. 7. Aggrieved with the order, the appellant preferred an appeal before Ld. CIT(A) whereas the Ld.CIT(A) confirmed the AO order in its entirety. 8. Aggrieved with the order of Ld.CIT(A), the appellant preferred an appeal before Hon’ble bench. Ground of Appeal No. 1 The Ld. CIT(A) has erred in law as well as on the facts of the case in confirming the action of Ld.AO of initiating the assessment proceeding u/s 143(3) of the Income Tax Act. The very action taken u/s 143(3) of the act, is bad in law and without jurisdiction. Hence, the same kindly be quashed. Ground of Appeal No. 2 The Ld. CIT(A) erred in law as well as on the facts of the case in confirming the action of Ld.AO of making addition u/s 68 of the Act, despite impliedly rejecting books of accounts u/s 145(3). The addition so made is wrong in law as well as on the facts of the case. Hence, the same kindly be quashed. Ground of Appeal No. 3 The Ld. CIT(A) erred in confirming the action of Ld.AO in making addition of Rs. 1,26,72,500/- despite accepting the declared turnover and at the same time treating the cash sale to the extent of Rs. 1,26,72,500/- as bogus. Hence, the addition so made has resulted in double taxation in case of the assessee and is unjustified, excessive and illegal, and may kindly be deleted. Ground of Appeal No. 4 Alternatively, and without prejudice to anything stated above, the Ld. CIT(A) has erred in law as well as on the facts of the case by confirming the action of Ld.AO in not reducing the GP in respect of sale of Rs.1,26,72,500/-, which was alleged to be bogus. Findings of Ld. AO: (Para A on Page No. 6 and Para 5 on Page No. 7 of the order) “...The sale recorded in September and October is purely adjustment and sounds abnormal. And therefore, it is also not justified. Printed from counselvise.com 7 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. ….there is no any seasonal factor (like Festival etc) is affecting the sales of the assessee every year. The assessee is simply making a story of cash sales as a source of cash deposits. …… The assessee has not produced the bills for such sales. In absence of any supporting evidence, truthfulness of such sales cannot be verified. In such case, the transaction is genuine or not cannot be ascertained. It is humanly impossible to sell goods worth Rs. 71,39,483 in such a short time span if other circumstances are unchanged. …… 5. Applicability of section 68: The onus to prove the identity, genuineness and creditworthiness was on the assessee and it failed to discharge it. Therefore, the amount of Rs. 1,26,72,500/- which is cash deposited in the bank during the period of demonetization is considered as unexplained cash credits……” Findings of the Ld. CIT(A): (Para 7 on Page No. 40 of the order u/s 250, dated 27.12.2019) “The undersigned has analysed the cash deposit and cash balance pattern of the appellant for the F.Y. 2015-16 & 2016-17. During the F.Y. 2015-16, the appellant had deposited more than ninety percentage of cash in hand in every month whereas for F.Y. 2015-16 the cash deposit was less than ten percentage. The appellant has not given any valid reason that why the huge cash was accumulated from April 2016 to till demonetization period. If any requirement is there for the cash, the same might be utilized as cash expenditure or the same should be deposited in the bank. The appellant has claimed that the cash was kept as cash in hand without furnishing any valid reason for accumulating the cash. 7.4 Further, it is clear from the cash deposit pattern that the appellant has made cash deposit of Rs.1,63,11,200/- in the F.Y. 2016-17 out of which Rs.1,26,72,500/- pertains to demonetization period which is eighty percentage of the total cash deposit whereas the ratio for F.Y. 2015-16 for the same period is twenty six percentage only. The appellant has not explained the reason for sudden increase in cash sales of camera and its accessories during demonetization period. The appellant has not furnished the sales bill for the cash sale and identity of the person to whom the sales was made before the Assessing Officer as well as the undersigned also. The appellant has relied upon various case laws which are perused by the undersigned. The facts of those case laws, which are relied upon by appellant, are not relevant to assessee’s facts. Printed from counselvise.com 8 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. 7.5 In view of the above mentioned facts and discussion, the appellant could not establish through documentary evidences that the source of the cash deposit made during the demonetization period was from sale of cameras and its accessories. The appellant could not give valid reason with documentary evidences for accumulating the huge cash from April 2016 to till demonetization period. Further, the appellant failed to prove the identity, genuineness and creditworthiness of the cash deposits during the course of assessment proceedings as well as during the appellate proceeding also. Therefore, the Assessing Officer has correctly assessed the cash deposit made of Rs. 1,26,72,500/- during demonetization u/s 68 of the I.T. Act.” Submission: A. Consistent Sales Growth and Absence of Any Abnormality: 1. At the outset, it is humbly submitted that the entire basis for the opinion, formed by the Ld. AO and the Ld. CIT(A), rests on a comparative/trend analysis of sales and cash deposits for the Financial Years 2015-16 and 2016-17. However, the inferences drawn by the Ld. AO from this comparative analysis are factually incorrect and not supported by the actual records. 2. For the sake of clarity, the relevant details of sales for both years are summarized below: Particulars F.Y. 2016-17 F.Y. 2015-16 % Change Total Sales 14,12,84,431 12,07,68,635 16.98 % Total Cash Sales 2,28,28,614 4,02,01,106 43.21 % Cash Sales During the month of October and November up to 8th 71,39,483 58,09,920 22.88 % 3. As is evident from the above, there was an overall increase in total sales by 16.98% in F.Y. 2016-17 compared to the previous year. However, cash sales actually decreased by 43.21% over the same period. This clearly demonstrates that the Ld. AO’s observation regarding alleged inflation of cash sales is factually incorrect. Contrary to the assertion that cash sales were inflated, the figures show a significant reduction and there is no evidence of any abnormal increase in the appellant’s business activity. 4. Furthermore, the allegation of the Ld. AO that “the sales recorded in September and October are purely adjustment and sound abnormal” is baseless. A review of the business trend further supports this position. In F.Y. 2014-15, the total turnover was Rs. 10,27,50,419/-, which increased to Rs. 12,07,68,635/- in F.Y. 2015-16, reflecting a growth of 17.54%. This consistent growth pattern indicates that the increase in F.Y. Printed from counselvise.com 9 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. 2016-17 is in line with the normal business trajectory, and the characterization of cash sales in F.Y. 2016-17 as ‘abnormal’ is merely presumptive and not based on any substantive evidence. The Audit reports for all three years are enclosed for reference [PBP: 1 to 28]. 5. The rejection of the appellant’s explanation regarding cash deposits is solely based on an analysis of cash in hand during the demonetization period, compared to previous and subsequent years. No inaccuracies in the books of accounts or sales declarations have been established. In this regard, it is pertinent to note that timing of cash deposits is a business decision. The assessee has the discretion to determine when to deposit cash based on business needs and future plans. As long as the source of the cash is legitimate and duly recorded, the timing of deposits should not be a basis for addition, especially in the absence of any contrary evidence. In this regard we rely on the decision of Hon’ble ITAT, Delhi in the case of ACIT Vs Ashish Bansal [ITA No. 7427/Del/2018], dated 02.06.2023, wherein the Hon’ble ITAT reiterated this principle and decided in the favour of the assessee: “It is a well acceptedprinciple tax jurisprudence that the Assessing Officer cannot sit on the arm chair of a businessman assessee to replace his business strategy by his own whims and fancies. When the assessee took decision to reduce GP rate with an intention to fetch high turnover resulting into increase in the total net profit and under this strategy the assessee under took turnover of 34 times in comparison to the immediately preceding year taking sky high increase in the turnover which resulted into reduction of GP rate to 0.41%. … ……. Accordingly, grounds of revenue being devoid of merits are dismissed. 11. In the result, the appeal of revenue is dismissed.” 6.Accordingly, applying the above principle to the present case, until the source of cash deposits is found unexplained or unsupported, the Assessing Officer cannot presume the deposits to be non-genuine merely on the basis of timing of deposits. Businessmen often retain cash to meet operational contingencies and deposit it as and when needed. There is no mandate in law that immediate deposit is required. 7. Further, The Hon’ble ITAT, Delhi in the case of ACIT Vs. Baldev Raj Charla 121 TTJ (Del) 366, held as under: “We have heard the rival submissions and perused the material available on record and have gone through the orders of the authorities below. We find that this explanation of the assessee was found correct that against these five deposits on dated 14th June, 1996, Rs. 31,000; 21st July, 1997, Rs. 1,27,000; 19th Sept., 1997, Rs. Printed from counselvise.com 10 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. 22,000; 4th October, 1997, Rs. 26,000 and on 7th November, 1997, Rs. 52,000/- there were sufficient cash withdrawals from AWI and from SBL Mayapuri, but this addition has been confirmed by Ld. CIT(A) on the basis that there is time gap between the assessee’s withdrawals from his own partnership M/s AWI or from his own bank. There is finding recorded by the Ld. AO or by the Ld. CIT(A) that apart from depositing these cash into bank as explained by the assessee, there was any other user by the assessee of these amounts and in the absence of that, simply because there was a time gap, the explanation of the assessee cannot be rejected and hence the addition confirmed by the Ld. CIT(A) is not correct. We, therefore, delete the same. This ground of the assessee is allowed.” 8. In the present case as well, the timing of deposits is irrelevant as long as the Assessing Officer has not pointed out any inconsistency. Please note that no defects have been found in the books or VAT returns of the appellant. Accordingly, the source stands explained, and thus, the addition merely on the ground of timing is unsustainable in law. B. Addition Cannot Be Made on Account of Alleged Bogus Cash Sales When the Turnover Is Already Accepted: 1. The appellant maintained regular books of account, which were duly audited under Section 44AB of the Income Tax Act and the same was produced before the Ld.AO. The sales are duly recorded in the books of accounts of appellant and there was availability of stock to affect such sales. Said sales were also shown in the return of Value Added Tax and duly accepted by the Commercial Tax Department, Government of Rajasthan, which were produced before the Ld. AO earlier [PBP: 29 to 63]. 2. The Ld. A.O., in assessment order dated 27.12.2019, had not doubted opening stock, purchases, gross profit and closing stock as declared by appellant. The A.O. has not doubted the declared closing stock which implies outgo from opening stock and purchases has been accepted which can be on account of sales made by appellant and thus out of declared sales some sales cannot be held as bogus or ingenuine sales. 3. The cash deposited during the demonetisation period represents sales proceeds, as recorded in the books. The genuineness of cash sales was doubted on the ground that cash sales are made to unidentifiable persons. In this regard, it is important to understand the nature of business operations of the appellant. The appellant is in the retail trading of cameras, memory cards, computer printers and accessories of cameras. In this kind of business, items are often small in value and sold to walk – in customers and small transactions are usually executed in cash. Even as per Rule 114B Printed from counselvise.com 11 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. of the income tax rules, there is no need to quote PAN when transaction of sales or purchase of goods is of value not exceeding two lakh rupees. Thus, sales transactions should not be disbelieved only for the reason that the assessee could not give the identity of all the purchasers, In this regard, we rely on the following judgement:  Hon’ble Bombay High Court in the case of R.B. Jessaram Fetehchand (Sugar Dept.) vs Commissioner of Income-Tax, Bombay, (1970) 75 ITR 33, held sas under: “….. . In these circumstances, the reason given by the Income-tax Officer for rejecting the book results shown by the assessee's accounts or for not accepting the cash transactions as genuine cannot be accepted as good and sufficient unless there was an obligation on the part of the assessee to keep a record of the addresses of the cash customers. It could not, therefore, be said that the failure on his part to maintain the addresses was a suspicious circumstance giving rise to a doubt about the genuineness of the transactions entered into by the assessee. 4. In the case of a cash transaction where delivery of goods is taken against cash payment, it is hardly necessary for the seller to bother about the name and address of the purchaser. In our opinion, therefore, the rejection of the results of the assessee's cash book by the Income-tax Officer was not at all justified and the Appellate Assistant Commissioner, therefore, was right in deleting the addition made by the Income-tax Officer.” C. No Addition Warranted u/s 68 of the Income Tax Act, 1961: 1. Without prejudice to anything stated above and without any admission, it is humbly submitted that the invocation of Section 68 of the Act, in the present case, is misplaced and contrary to settled legal principles. 2. Section 68 of the Act provides that if any sum is found credited in the books of an assessee and such assessee either (i) does not offer any explanation about nature and source of money; or (ii) the explanation offered by the assessee is found to be not satisfactory by the Assessing Officer, then, such amount can be taxed as income of the assessee. 3. In the present case, the source of cash deposit has already been explained as arising from recorded sales and opening cash balance, both supported by the books of accounts, reflected in the turnover and taxed under the head “Profit and Gains of Business or Profession”, the same amount cannot be taxed again as unexplained under Section 68. Further, VAT returns filed by the assessee and accepted by the Printed from counselvise.com 12 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. Commercial Tax Department, Government of Rajasthan were also placed on record, and no discrepancies or adverse findings were noted by the authorities. 4. It is a settled legal position that once sales are accepted and taxed as business income, the cash deposited out of such sales cannot again be treated as unexplained cash credit under Section 68. Doing so would result in double taxation of the same income, which is impermissible in law. 5. Therefore, the very foundation for invoking Section 68 is absent, and the addition made on this basis is liable to be deleted in full. In this regard, we rely on the following case laws:  Hon’ble ITAT Jaipur in the case of Assistant Commissioner of Income Tax Vs. Shri Chandra Surana [ITA No. 166/JP/2022], dated 15.12.2022, held as under: “2.6 We have heard both the parties and perused the materials available on record. From the assessment records, it is noted that the AO made an addition of Rs.2,90,93,500/- in declared income by holding that said amount of cash deposited by the assessee in his bank account during the demonetization period is nothing but the undisclosed income of assessee which was shown under the garb of cash sales and thus it is liable to be added u/s 68 of the Act and taxable @ 60% under the provision of Section 115BE of the Act. It is also noted from the order of the ld. CIT(A) at para 4.1 wherein the ld. CIT(A) has described para 1.4 of assessee written submission that complete regular books of accounts, bill, vouchers and day to day stock register having complete quantitative details have been maintained by the assessee. The said books of accounts are audited. A copy of audited statement of account alongwith complete quantitative details have been submitted alongwith the return of income. The assessee maintained manual itemwise stock register. The said stock register was bulky and so could not be produced in e-proceedings but was produced before the AO in course of hearing as is evident from submission dated 27-09-2019. The fact of maintenance of stock register manually is stated in Tax Audit Report also. Thus the cash sales transaction is recorded in regular books of accounts, sales are made out of stock-in-trade. The assessee also filed copies of sales invoice No. 82 to 158 of Bangaluru and 110 to 216 of Koklata outlets before AO which were of 28-10-2016 and these were earlier produced before Investigation Wingh in F.Y. 2016-17 i.e. after the sales were made and same were verified by the Investigation Wing also. This view of the ld. CIT(A) indicates that the assessee has maintained regular books of accounts, bills, vouchers and day to day stock register having complete quantitative details and said books of accounts are audited. The assessee vide submission dated 27-09-2019 had produced stock record during the course of hearing. The cash sales transactions are recorded in regular books of accounts and the sale are made out of stock in trade for which no adverse finding had been observed by the AO except for Printed from counselvise.com 13 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. the change in the methodology in issuing bills as mentioned at page 7 to 8 of the assessment order. Further the ld. CIT(A) observed that the AO had treated the cash deposited in the bank during the demonetization period in demonetized currency as unexplained cash credit u/s 68 of the Act although the nature and source of the cash deposits being proceeds arising out of cash sales etc. was evident from the entries in the audited books of accounts of the assessee. In this case, the books of account of the assessee had been audited by an independent auditor. The cash sales and receipts are duly supported by relevant bills which were produced in the course of assessment proceedings before the AO and it is not the case of the AO that the assessee did not have sufficient stock for making the sales. Hence, it cannot be said that the figures of sales and purchases are not supported by the quantitative details and the AO did not make any enquiry on the material supplied by the assessee. Thus the AO neither brought any material on record to establish that the sale bills are bogus nor provided any evidence that such sales are bogus. It is also an open fact that the demonetization of Rs.500/- and Rs.1000/-note was declared by the Hon’ble Prime Minister at 8 PM on 8-11-2016 and after this announcement the persons reached the jewellery shop to buy jewellery in exchange of notes. Thus all such scenario indicates that the assessee had duly substantiated its claim from the documentary evidences and also with the facts. It is also observed from the assessment order that the AO had not rejected the books of account of the assesee as no contrary material was available with him to reject the books of account of the assessee. As regards the addition of Rs.2,90,93,500/- made by the AO by applying the provisions of Section 68 of the Act, it is noted that provisions of Section 68 are not applicable on the sale transactions recorded in the books of accounts as sales are already part of the income which is already credited in P&L account. Hence, there is no occasion to consider the same as income of the assessee by invoking the provisions of Section 68 of the Act. In view of the above deliberations and case laws relied upon by both the parties, we find that the AO was not justified in making an addition of Rs.2,90,93,500/- u/s 68 of the Act which has rightly been deleted the ld. CIT(A) and we concur with his findings. Thus the appeal of the Revenue is dismissed.”  Hon’ble ITAT, Delhi in the case of Jatin Arora Vs. ITO [ITA No. 1833/Del/2023], dated 30.05.2025, held as under: “The Learned AR also submitted that the amount of cash deposits of Rs 49,88,748/- which the Learned AO made addition u/s 68 of the Act is already included in the turnover declared of Rs 55.49,170/-by the assessee in his return of income which is total receipts received by the assessee during the relevant year and the Learned AO nowhere mentioned that the cash deposits which made addition u/s 68 of the Act is different from those mentioned by the assessee as turnover in his return of income. Printed from counselvise.com 14 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. 10. On the basis of foregoing fact situation, we find merit in the contentions raised by the assessee. Accordingly, the appeal of the assessee deserves to be allowed. The impugned addition made in the assessment order dated 14.12.2019, as sustained by the order of the Ld. CIT(A) dated 18.04.2023, is directed to be deleted. 11. In the result, appeal of the assessee is allowed as indicated above.”  Hon’ble Delhi High Court in the case of PCIT Vs Singhal Exim Pvt. Ltd, [ITA 228/2020], dated 22.02.2021, held as under: “On the aspect of additions being made under Section 68 of the Act, we notice that the ITAT was intrigued with the approach of the AO, and rightly so, in our view. The Assessee had worked out the business income after considering the sales and purchases of mobile phones which included the high-sea sales. In these circumstances, the ITAT observed that the addition under Section 68 or 69C is contradictory to the stand taken while accepting the business income. ……. ….. 13. The genuineness of the transactions has been accepted on the basis of documentary evidence and other material gathered, which cannot be re-appreciated under Section 260A of the Act. We also do not find any perversity in the approach of the ITAT.” Ground of Appeal No. 5: The Ld. CIT(A) has erred in confirming the action of Ld.AO in concluding that the appellant has not discharged the onus of proving genuineness of cash deposit, without appreciating the submission made by the appellant. Submission: 1. As already explained in grounds above, the appellant maintained books of accounts, recorded all transactions therein, and provided all the supporting records. The source of cash deposit was clearly explained as arising from recorded sales and opening cash balance. Further, the appellant has already offered the sales for taxation, hence the onus has been discharged by the appellant and the same income cannot be taxed again 2. As per settled law, once a transaction is recorded in the regular books and supported by primary documents, the initial burden of proof stands discharged. The onus then shifts to the AO to bring contrary material or evidence on record to rebut the assessee’s explanation. Merely rejecting the explanation based on suspicion or pattern of deposits, without proving it to be false, is not sufficient in law. Printed from counselvise.com 15 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. 3. It is a settled legal principle that onus of proof is on the person who makes the allegation and not on the person who has to defend. As per legal maxim “affairmanti non negantiincumbit probation” means burden of proof lies upon him/ her who affirms and not upon him/ her who denies. Similarly, as per doctrine of common law “incumbit probation qui digit non qui negat” i.e. burden lies upon one who alleges and not upon one who deny the existence of the fact. Therefore, the Ld. AO has failed to discharge his onus of proof, especially when addition has been made under “deeming fiction”. 4. It would be pertinent to refer to the decision of Hon’ble Apex Court in the case of Umacharan Saha & Bros Co. v/s CIT 37 ITR 21 (SC) wherein it was held that suspicion, however, strong cannot take place of proof. 5. Further, Hon’ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd v/s CIT (1954) 26 ITR 775 (SC) has held that although strict rules of evidence Act do not apply to income tax proceedings, assessment cannot be made on the basis of imagination and guess work. 6. Hon’ble ITAT, Jaipur in the case of Dinesh Kumar Soni, Jaipur vs Dcit Cen Cir 1 Jaipur, Jaipur, 27 September, 2024, [ITA. No. 863/JPR/2024], held as under: “….thereby he hold balance amount of Rs. 12,90,178/- [ 32,22,668 less 19,32,490/- ] as unexplained credit and the sales to that extent not considered and added as income as per provision of section 68 of the Act. While doing so ld. AO noted that the assessee has not provided satisfactory explanation about the nature and source of cash deposits. Here we note that one the one hand ld. AO accepted the sales of Rs. 19,32,490/- and on the other hand on the same set of evidence placed before him he is not considered the other part of the sales and that too based on the estimation, presumption and assumption he has not placed on record failure on the part of the assessee as when the part of the sale is considered then why the other part is not considered. Looking to the overall facts of the case and material available on record we are of the considered view that the addition made by the ld. AO and sustained by the ld. CIT(A) merely based on the presumption and assumption. They did not deal to the fact of the case on the same set of evidence part of the sale is accepted and part of the same were not accepted. Considering that factum we do Sh. Dinesh Kumar Soni vs. DCIT not find any reason to sustain the addition and therefore, we direct the ld. AO to delete that addition made in the hands of the assessee. Printed from counselvise.com 16 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. 7. The Hon’ble ITAT, Jaipur Bench “B”, Jaipur in the case of Abhilasha Jain Vs DCIT, Circle (Intl Tax), Jaipur [ITA No. 05/JP/2022], allowed the appeal of the appellant and held as under: “In the above judgment the Coordinate Bench decided that the addition made by the AO merely on suspicion and without bringing any cogent material on record to establish that assessee cannot be keep the cash on hand being a non-resident of India. It has been observed from the record that the assessee as meticulously given case flow statement giving different date wise cash available is supported by the bank statement placed on record. The assessee has also placed on record the affidavit of his mother supported by the withdrawal made by her mother from her bank accounts all these evidences, the Revenue failed to establish any fault or contrary finding to this bulk of papers and merely the addition sustained on account of suspicious reasons..” 8. Hon’ble ITAT, Ahmedabad in the case of Abhishek PrakashchandChhajed Vs. ITO [ITA No. 113/AHD/2023], dated 04.10.2023, held as under: “13.3 In view of the above detailed discussion and after considering the facts in totality, we are of the view that the assessee has duly discharged the onus cast upon him u/s 68 of the Act and the burden shifted upon the AO/revenue authority to bring the material on record before rejecting the explanation/evidence submitted by assessee is not satisfactory. However, the revenue authorities failed to discharge the burden shifted on them. Therefore, in such facts and circumstances, the sum credited in the books of the assessee cannot be treated as unexplained u/s 68 of the Act. Hence, we hereby set aside the findings of the Ld. CIT(A) and direct the AO to delete the addition made by him. thus, the ground of appeal of the assessee is allowed. 14. In the result, the appeal filed by the assessee is hereby allowed.” 9. Hon’ble ITAT, Jaipur in the case of Sh. Sanjay Godha, Jaipur vs. ACIT [ITA No. 539/JP/2024], dated 29.08.2024, held as under: “This withdrawal and source of this amount withdrawn is not in disputed. Even the assessee claimed that the revenue did not proved in the assessment proceeding subsequent to the search the utilization of the said cash so withdrawn from the bank account. The belief of the assessee after the search to have the demand and to avoid recovery of those demand he has made withdrawal of cash from the bank account. This explanation of the assessee was rejected merely based on the surmises and conjecture and the evidence so filed was rejected based on these assumptions and presumptions. …… Printed from counselvise.com 17 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. …… 17. Thus, once the assessee explained that source of cash deposit in the bank account is out of the earlier withdrawals made from the same bank account, the burden of proof is on the department to establish that cash has been utilized elsewhere if the explanation of assessee is not to be accepted. We get support of this view from the decision of CIT vs. Sh. Sanjay Godha vs. ACIT Kulwant Rai 291 ITR 0036 (2007) (Delhi HC) wherein the high court held that; The relevant Para 16 is reproduced as under: \"16. This cash flow statement furnished by the assessee was rejected by the AO which is on the basis of suspicion that the assessee must have spent the amount for some other purposes. The orders of AO as well as CIT(A) are completely silent as to for what purpose the earlier withdrawals would have been spent. As per the cash book maintained by the assessee, a sum of Rs. 10,000 was being spent for household expenses every month and the assessee has withdrawn from bank a sum of Rs. 2 lacs on 4th Dec., 2000 and there was no material with the Department that this money was not available with the assessee. It has been held by the Tribunal that in the instant case the withdrawals shown by the assessee are far in excess of the cash found during the course of search proceedings. No material has been relied upon by the AO or CIT(A) to support their view that the entire cash withdrawals must have been spent by the assessee and accordingly, the Tribunal rightly held that the assessment of Rs. 2.5 lacs is legally not sustainable under s. 158BC of the Act and the same was rightly ordered to be deleted.\" Based on the discussion so recorded herein above ground no. 1 raised by the assessee is allowed.” 10. In the present case, the Ld. AO has not brought on record any concrete or corroborative evidence to disprove the explanation offered by the appellant. The findings are based solely on presumptions, surmises, and conjectures, all of which have been specifically rebutted with supporting documentary evidence in the foregoing submissions. It is a settled principle of law that additions cannot be sustained merely on the basis of suspicion or assumptions in the absence of any credible material. Ground of Appeal No. 6: Printed from counselvise.com 18 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. The Ld. CIT(A) has erred in law as well as on the facts of the case by confirming the action of Ld. AO in invoking Sec 115BBE, which is contrary to provisions of law as well as facts of the case. Submission: 1. At the outset, and as already explained in detail under the submissions relating to Section 68, the provisions of Section 68 are not applicable in the present case, since the cash deposits, in question, have been duly explained as arising from recorded cash sales and opening cash balance. Therefore, since provision of Section 68 is not applicable, provision of section 115BBE is not attracted in the current case. 2. Without prejudice and without any admission, even otherwise the rate of tax applied by the Ld. AO u/s 115BBE is incorrect and excessive. 3. The Ld. AO has applied tax at the rate of 60%, relying on the amended provisions of Section 115BBE introduced by the Taxation Laws (Second Amendment) Act, 2016, which came into effect from 01.04.2017. 4. This amendment enhancing the tax rate from 30% to 60% (plus surcharge and cess) is a substantive change in law, not merely procedural or clarificatory. As held by the Hon’ble Supreme Court in CIT v. Vatika Township (P) Ltd. (2014) 367 ITR 466 (SC), any amendment which increases the tax burden on the assessee must be applied prospectively, not retrospectively. 5. Since the relevant transactions of cash deposit occurred before the amendment came into force (i.e., during November 2016), the enhanced rate of 60% under Section 115BBE cannot be retrospectively applied to the present case. 6. Therefore, even otherwise, without any admission, the applicable tax rate under Section 115BBE at the relevant time was 30%, not 60%. The application of 60% tax is legally unjustified. In this regard, we rely on the following judgement:  Hon’ble Madras High Court in the case of S.M.I.L.E Microfinance Limited Vs ACIT [W.P.(MD)No. 2078 of 2020], dated 19.11.2024, held as under: “17. In the aforesaid objects and reasons nowhere it is stated that due to “demonetization” the unaccounted money ought to be charged 60% rate of tax. It only states that step had been taken to curb black money by withdrawing Specified Bank Notes of denomination of Rs.500 and Rs.1000. And also states the people may find illegal ways of converting their black money into black again, hence as per experts Printed from counselvise.com 19 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. advice heavy penalty ought to be levied. From the language of the object “that instead of allowing people to find illegal ways of converting their black money into black again”, it is evident that the government is intended to impose the same for future transactions. Especially the use of word “again” in the object would clearly indicate it is for future transactions i.e. from 01.04.2017. Therefore this Court is of the considered opinion that the revenue is empowered to impose 60% rate of tax for the transactions from 01.04.2017 onwards and not prior to the said cut-off date. And for prior transaction the revenue is empowered to impose only 30% rate of tax.” Ground of Appeal No. 7 That the appellant craves your indulgence to add, amend or alter all or any grounds of appeal before or at the time of hearing.” 7. On the contrary, the ld. DR supported the orders of the lower authorities. 8. We have heard both the parties and perused the materials available on record. The bench noted from the order of ld. AO that the Ld. AO added Rs. 1,26,72,500/- as unexplained cash credit under Section 68, citing that there is un- precedent and abnormal increase in sales in the month of October and November (upto 8th November) which is not justifiable looking at the past cash deposit history, sales in the other months of the same financial year and absence of seasonal factor. We also note from the order of ld. AO that the ld. AO stated that neither any documentary evidence to support cash sales was submitted nor identity, genuineness and creditworthiness of customers were submitted. Further, we also note that the ld. CIT(A) upheld the order of the ld. AO by observing that the assessee has not submitted any valid reason for accumulation of such huge cash, Printed from counselvise.com 20 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. sudden increase in cash sales and could not establish through documentary evidence that the source of the cash deposit was sales. 9. Before us, ld.AR for the assessee submits that the assessee has maintained complete books of accounts and during the course of assessment proceedings, all the details as called for were filed before the AO. The ld. AR of the assessee further submits that there is no abnormality in cash sales compared to the previous F.Y. rather the cash sales, of the current year, actually decreased by 43.21% as compared to F.Y. 2015-16 which clearly demonstrates that the Ld. AO’s observation regarding alleged inflation of cash sales is factually incorrect. The ld. AR of the assessee further denied the contention of the ld. AO that the sales recorded in September and October are purely adjustment and sound abnormal by submitting that in F.Y. 2014-15, the total turnover was Rs. 10,27,50,419/-, which increased to Rs. 12,07,68,635/- in F.Y. 2015-16, reflecting a growth of 17.54%. This consistent growth pattern indicates that the increase in F.Y. 2016-17 is in line with the normal business trajectory, and the characterization of cash sales in F.Y. 2016-17 as ‘abnormal’ is merely presumptive and not based on any substantive evidence. With regard to the accumulation of huge cash, the ld. AR of the assessee further submitted that the timing of cash deposits is a business decision and the assessee has the discretion to determine when to deposit cash based on business Printed from counselvise.com 21 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. needs and future plans. The ld. AR of the assessee also submitted that the sales are duly recorded in the books of accounts of appellant and there was availability of stock to affect such sales. Further, said sales were also shown in the return of Rajasthan Value Added Tax returns and the ld. AO has not doubted opening stock, purchases, gross profit and closing stock as declared by appellant. Hence the cash sales are genuine and the assessee has discharged his onus of proof by submitting the VAT Returns in support of the cash sales made. With respect to invocation of Section 68 of the Act, the AR of the assessee submitted that once sales are accepted and taxed as business income, the cash deposited out of such sales cannot again be treated as unexplained cash credit under Section 68. On invoking Section 115BBE of the Act, it was submitted by the ld. AR of the assessee that section 115BBE cannot be invoked in absence of section 68 and the rate of substituted rate of 60% is not applicable for the year under consideration. 10. We have heard the contentions of both the assessee and the respondent and considered facts of the case. On perusal of the facts, it is seen the assessee filed his VAT returns under Rajasthan VAT Act, for the current year, on which VAT has also been paid on sales reported therein. We do not find any adverse findings given or the observations made with respect to sales contained in the VAT returns. Further, no evidences have been brought by the ld. AO and ld.CIT(A)establishing Printed from counselvise.com 22 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. that the sales made by the assessee and shown in VAT Returns have been doubted or not accepted by VAT authorities. The ld. AO also nowhere in the assessment order noted the finding that after inflating the cash sales the assessee has frequently revised its VAT returns. 11. The total sales incorporating cash sales are duly recorded in assessee books of accounts and the ld. AO has neither doubted the audited books of accounts nor point out any defects in the books of accounts nor the books of accounts were rejected. The said books of accounts are also audited u/s 44AB of the Act. Further, the ld. AO had also neither doubted the availability of stock with the assessee prior to cash sales nor there is any allegation of any bogus purchases which means the ld. AO was satisfied that the assessee was having sufficient stock in hand for making the impugned sales during the demonetization period. Therefore, it is evident that the ld. AO has not doubted the books of accounts of the assessee and did not find any defect in sales, purchase, stock and profit recorded/declared therein and have also not produced any documentary evidence of any possibility of back dating of cash sales or cash sales being bogus. On the contrary the assessee has submitted complete details with documentary evidences and thus discharges his onus. Therefore, it appears that the entire assessment is based on presumptions and it is unjustified, on the part of the ld. AO and CIT(A), to treat the cash deposit Printed from counselvise.com 23 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. as unexplained without bringing, on record, any corroborative evidence to support the allegation that unexplained cash was deposited during demonetization and without disputing the purchases, sales, opening stock, closing stock, and without pointing out any defects in the books of accounts of the assessee. Reliance is placed on the following case laws :- 1) Hon’ble ITAT, Visakhapatnam held that in the case of ACIT vs. M/s Hirapanna Jewellers [ITA No. 253/Viz/2020] held as under:- “Purchases, sales and the Stock are interlinked and inseparable. Every purchase increases the stock and every sale decreases the stock. To disbelieve the sales either the assessee should not have the sufficient stocks in their possession or there must be defects in the stock registers/ stocks. Once there is no defect in the purchases and sales and the same are matching with inflow and the outflow of stock, there is no reason to disbelieve the sales. The assessing officer accepted the sales and the stocks. He has not disturbed the closing stock which has direct nexus with the sales. The movement of stock is directly linked to the purchase and the sales. Audit report u/s 44AB, the financial statements furnished in paper book clearly shows the reduction of stock position and matching with the sales which goes to say that the cash generated represent the sales. The assessee has furnished the trading account, P& L account in page No.7 of paper book and we observe that the reduction of stock is matching with the corresponding sales and the assessee has not declared the exorbitant profits. Though certain suspicious features were noticed by the AO as well as the DDIT (Inv.), both the authorities did not find any defects in the books of accounts and trading account, P&L account and the financial statements and failed to disprove the condition of the assessee. Suspicion however strong it may be, it should not be decided against the assessee without disproving the sales with tangible evidence” 2) Hon'ble ITAT Delhi in ITO V. M/s J.K. Wood India Pvt Ltd, 2024 (1) TMI 1262, held as under:- “14. We have given thoughtful consideration to the factual matrix discussed hereinabove The undisputed fact is that there is not even a whisper of any defect, error or infirmity in the books of account maintained by the assessee which were audited both under the Companies Act and under the Income tax Act. The books of account have been maintained in the regular course of business and cash deposits in the books of account are duly reflected in the books of account Printed from counselvise.com 24 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. 15. Sales made by the assessee and shown in the regular books of account have been accepted as such by VAT authorities while framing the VAT assessment. The assessee was having sufficient stock in hand for making the impugned sales during the demonetization period and it is not the case of the Assessing Officer that the assessee has shown bogus purchases to show bogus sales to cover up cash deposited during the demonetization period” 12. We also see that the ld. AO and ld. CIT(A) have also objected to the cash deposit to cash sales ratio. The ld. AO stated that the cash deposit made during October and 08th November, 2016 out of cash sales is higher than the cash deposit made out of cash sales in the same period in F.Y. 2015-16. It is a settled law that the addition u/s 68 of the Act on account of cash deposits cannot be made simply on the reasons that during the demonetization period cash deposits to cash sale ratio is higher as compared to the previous year. If the ld. AO has not found any defect in books of accounts of the assessee, then simply because there was a higher cash sale in a particular period cannot be a reason for treating it as an unexplained income. Further, the ld. AO and ld. CIT(A) has not brought before us any evidence to establish that the such cash was generated out of bogus or unaccounted sales. 13. On perusal of the total sales for the current year, we find that the total sales of the assessee have increased by 16.98% from previous year and the overall cash sales, although increased from 58,09,920/- to 71,39,483 (increase of 22.88%) during October, 2016 to 8th November, 2016 from the same period in F.Y. 2015- 16, however decreased from 4,02,01,106 to 2,28,28,614 which is a decrease of Printed from counselvise.com 25 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. 43.21% from the previous year. Further, the ld. AO himself has accepted the cash sales of Rs. 58,09,920/-made by the assessee during October, 2015 to 8th November, 2015 and not doubted the cash deposit made during this period. Hence, we don’t agree with the theory of the lower authorities that sales recorded during October, 2016 to November, 2016 is adjustment as we don’t find any abnormality in the cash sales made during October, 2016 to 8th November, 2016 considering the fact that the total sales have also increased and the nature of business involves B2C sales also. Therefore, we don’t find the action of the lower authorities of making addition @ 100% cash deposit during demonetization, justified. 14. Further, it is well settled in law that once sales are accepted and taxed as business income, the cash deposited out of such sales cannot again be treated as unexplained cash credit under Section 68 and doing so would result in double taxation of the same income. As observed above, the lower authorities have not disputed this fact that the assessee has already included the entire cash sales in the total sales and the profits have been derived which were offered for tax, thus taxing the same income twice is against the settled law. Reliance is placed on the following case laws:- 1) Hon'ble Supreme Court in the case of CIT vs. Devi Prasad Vishwnath Prasad (1969) 72 ITR 194(SC)held that “It is for the assessee to prove that even if the cash credit represents income, it is income from a source, which has already been taxed.\" Printed from counselvise.com 26 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. The assessee has already offered the sales for taxation hence the onus has been discharged by it and the same income cannot be taxed again.\" 2) Hon'ble ITAT Delhi in the matter of Kishore Jeram Bhai Khaniya v. ITO [ITA. No. 980, 1220/Del./2011 dated 13.05.2014 ITAT- Delhi) held as under: \"There is another dimension to this issue. The Assessing Officer made addition of Rs. 22.06 lacs u/s 68 of the Act, which contemplates the making of addition where any sum found credited in the books of the Assessee is not proved to the satisfaction of the A.O. It is only when such a sum is not proved that the Assessing Officer proceeds to make addition u/s 68 of the Act. We are dealing with a situation in which the Assessee has himself offered the amount of cash sales as his income by duly including it in his total sales. Once a particular amount is already offered for taxation, the same cannot be again considered u/s 68 of the Act. In fact, such addition has resulted into double addition.\" Thus, in view of the detailed facts narrated above and respectfully following the judgments cited above, the addition made u/s 68 and taxed u/s 115BBE by the lower authorities deserves to be deleted. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 08/09/2025. Sd/- Sd/- ¼ xxu xks;y ½ ¼MkWa-,l-lhrky{eh½ (Gagan Goyal) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 08/09/2025. *Santosh vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. vihykFkhZ@The Appellant-Ashish Bhargava, Jaipur. Printed from counselvise.com 27 ITA No. 875/JPR/2025 Ashish Bhargava, Jaipur. 2. izR;FkhZ@The Respondent-DCIT, Circle-4, Jaipur. 3. vk;dj vk;qDr@CIT 4. vk;dj vk;qDr@CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZ QkbZy@Guard File {ITA No. 875/JPR/2025} vkns'kkuqlkj@By order, lgk;d iathdkj@Asst. Registrar Printed from counselvise.com "