ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-31, DELHI, NEW DELHI V. RAJESH CRAFTJEWEL INDIA PVT. LTD., NEW DELHI

ITA 3735/DEL/2025

AI Insights

The case involves Rajesh Craft Jewel India Pvt. Ltd, which faced an appeal from the ACIT, Central Circle-31, Delhi, concerning the assessment year 2017-18. The primary issue was the addition of Rs. 1.68 crores to the assessee's income under section 68 of the Income Tax Act, 1961, due to unexplained cash deposits during the demonetization period. The Tribunal acknowledged the assessee's efforts to categorize these deposits as cash sales but noted discrepancies compared to the previous year's cash sales. Consequently, a reduced addition of Rs. 8 lakh was deemed appropriate. Furthermore, the Tribunal addressed the application of a higher tax rate under section 115BBE, deciding instead to apply normal tax provisions based on judicial precedents.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 839802 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2026
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: F
• Assessment Year: 2017-2018
• Appeal Filed On: 05-06-2025
• Other Referred Cases: S.M.I.L.E. Microfinance Ltd. Vs. ACIT, W.P. (MD) No.2078 of 2020 & 1742 of 2020
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HARPREET KAUR
• Assessee Lawyers: SOMBIR SINGH
• Section: 68

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F”: NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 3735/Del/2025 (Assessment Year: 2017-18) ACIT, Central Circle-31, Delhi Vs. Rajesh Craft Jewel India Pvt. Ltd, 1171, Kucha Mahajani, Chandani Chowk, Delhi (Appellant) (Respondent) PAN: AABCR5234K Assessee by : Shri Sombir Singh, FCA Revenue by: Ms. Harpreet Kaur, Sr. DR Date of Hearing 05/02/206 Date of pronouncement 05/02/2026 O R D E R PER NAVEEN CHANDRA, A. M.: 1. This appeal of revenue is directed against the order of the ld. Commissioner of Income Tax (Appeals)-30, Delhi dated 14.02.2025 pertaining to AY 2017-18. 2. At the outset the ld DR pointed out that the addition has been made of Rs. 1.68 crores u/s 68 of the Act which was made as the assessee had failed to discharge its onus by proving the genuineness of the cash deposit. It is to say by the ld DR that the Printed from counselvise.com ITA No. 3735/Del/2025 Rajesh Craft Jewel India Pvt. Ltd Page 2 of 5 cash deposit during demonetization period was disproportionate vis-à-vis cash sales during the same period in the preceding year. 3. On the other hand, the ld counsel of the assessee stated that the assessee is in jewellery business and the books of account was not rejected. The cash sales, book of the stock register was not rejected and therefore, the cash deposit should be accepted as coming out of sale of the assessee. 4. We have heard the rival submissions and have perused the relevant material on record. In the instant case, we find that the assessee has attempted to prove the entire source of cash deposit during demonetization as cash sales. Although the assessee, prima facie, appears to have discharged its onus of explaining source of cash deposit, it’s contentions to prove the source, hardly deserves to be accepted in entirety especially when the AO found abnormal jump in the cash deposit as compared to the same period in the preceding year. On the other hand, the Revenue’s endeavour to disbelieve the assessee’s contention that cash deposit has been made out of sales, cannot be fully justified. In this factual matrix, there is some element of failure to explain some of the cash deposit, cannot be ruled out. Be that as it may, it is deemed appropriate, in larger interest of justice, that a lump-sum addition Printed from counselvise.com ITA No. 3735/Del/2025 Rajesh Craft Jewel India Pvt. Ltd Page 3 of 5 of ₹ 8 lakh only would be just and proper with a rider that the same shall not be treated as a precedent, so as to cover all loopholes. The ground of appeal no 1 to 5 is partly allowed. 5. In so far as assessee's levy of tax at a higher rate under section 115BBE of the Act is concerned, we find that the Madras High Court in the Writ petition in the case of S.M.I.L.E. Microfinance Ltd. Vs. ACIT, W.P. (MD) No.2078 of 2020 & 1742 of 2020, dated 19.11.2024 (Madras) has held that the impugned statutory provision would come into effect on the transaction done on or after 01.04.2017 only. Accordingly, we direct the AO to tax the addition under normal provisions of tax and not under the provisions of 115BBE. The additional ground raised by the assessee is allowed. 9. In the result, appeal of Revenue in ITA No. 3735/DEL/2025 is partly allowed. Order pronounced in the open court on 05/02/2026. -Sd/- -Sd/- (SATBEER SINGH GODARA) (NAVEEN CHANDRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 23/02/2026 A K Keot Copy forwarded to Printed from counselvise.com ITA No. 3735/Del/2025 Rajesh Craft Jewel India Pvt. Ltd Page 4 of 5 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi Printed from counselvise.com "