DCIT CIRCLE- 43(1), NEW DELHI V. MANISH DHAWAN, DERAWAL NAGAR, DELHI

ITA 3254/DEL/2023

AI Insights

The case involves an appeal by the Revenue against the order of the Commissioner of Income-tax (Appeals), which had overturned the assessment made by the Deputy Commissioner of Income Tax (DCIT), Circle-43(1), New Delhi. The original assessment had questioned the genuineness of cash sales of gold and jewelry during the demonetization period, suspecting them to be bogus. The Tribunal examined the evidence presented, including sales bills, purchase registers, and financial statements, and found that the books of account were maintained accurately without any defects. The Tribunal also noted that the Assessing Officer had not conducted adequate inquiries regarding the parties involved in the transactions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712534 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2017-2018
• Other Referred Cases: DCIT vs. Manuvel Malabar Jewellers Pvt. Ltd., ITA No.1011/Del/2022, Deepak Sharma vs. ACIT, ITA No.2886/Del/2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ KUMAR JAIN
• Assessee Lawyers: ATUL PURI
• Keywords: Additional evidence; Unexplained cash credit; Bogus
• Section: 143(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: E : NEW DELHI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No.3254/Del/2023 Assessment Year: 2017-18 DCIT, Circle-43(1), New Delhi. Vs Manish Dhawan, E-24, East Uttam Nagar, B-281, 3rd Floor, Derawal Nagar, Delhi – 110 009. PAN: AGTPD2222Q (Appellant) (Respondent) Assessee by : Shri Atul Puri, CA Revenue by : Shri Dheeraj Kumar Jain, Sr. DR Date of Hearing : 17.07.2025 Date of Pronouncement : 31.07.2025 ORDER PER ANUBHAV SHARMA, JM: This appeal is preferred by the Revenue against the order dated 18.09.2023 of the Commissioner of Income-tax (Appeals), NFAC, Delhi (hereinafter referred to as the Ld. First Appellate Authority or ‘the Ld. FAA’, for short) in Appeal No.CIT(A), Delhi-15/11145/2019-20 arising out of the appeal before it against the order dated 30.09.2021 passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by the DCIT, Circle- 43(1), New Delhi (hereinafter referred to as the Ld. AO). Printed from counselvise.com ITA No.3254/Del/2023 2 2. On hearing both the sides, we find that the ld. DR has heavily relied the assessment order submitting that it is a well reasoned order and circumstances show fabrication of bills and sales and rightly the ld. AO had invoked the principles of human probabilities to display the alleged sale of gold and jewellery during the demonetization period to be bogus. 3. In this context, we find that the ld.AO has specifically doubted the sale by observing that such a huge number of customers could not have been catered within a small showroom space and in three hours. The ld. AO observes in para 8.8 that the assessee has failed to produce the books of account as called for during the assessment proceedings, therefore, the genuineness and veracity of cash sale bills stands unverified. 4. Amongst other grounds, the Department raised ground No.4 that the ld.CIT(A) has erred in not providing an opportunity to the AO under Rule 46A to give comments/counter the issues raised. However, the ld. AR has submitted that no additional evidences were filed before the ld.CIT(A) and provisions of Rule 46A were not invoked. In this context, we find that in para 8.2, the ld. AO mentions of the fact that details as per the notice issued were filed and at page No.79, the ld.CIT(A) mentions that during the assessment as well as appellate proceedings the assessee has submitted sales bills, purchase register/accounts, stock register, his financial statements, VAT returns from 01.04.2016 to 31.03.2017, cash book and bank statements. The ld.CIT(A) mentions that cross verification on test check basis was also conducted to check the veracity and Printed from counselvise.com ITA No.3254/Del/2023 3 accuracy of the submitted financial statements. Thus, relying this facts from financials and materials, the ld.CIT(A) has concluded that there is no defect in the books of account especially the stock register. The ld.CIT(A) specifically mentions the fact that the ld. AO has not made any inquiry at least with regard to parties to whom PAN details and addresses were provided. Thus, the conclusion of the ld.CIT(A) that while the AO has accepted the books of account and entries in the books of account are matched, no case for making addition of unexplained cash credit is made out. We find that in such circumstances the coordinate Bench in case of DCIT vs. Manuvel Malabar Jewellers Pvt. Ltd., ITA No.1011/Del/2022, order dated 18.08.2023 and Deepak Sharma vs. ACIT, ITA No.2886/Del/2022, order dated 26.03.2025, have benefitted the assessees. The grounds raised by the Revenue, thus, have no substance. The appeal of the Revenue is dismissed. Order pronounced in the open court on 31.07.2025. Sd/- Sd/- (S. RIFAUR RAHMAN) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 31st July, 2025. dk Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi Printed from counselvise.com "