GANDARAM AND SONS JEWELLERS PVT LTD,DELHI V. AC CIRCLE 10(1), NEW DELHI

ITA 3754/DEL/2025

AI Insights

Gandaram & Sons Jewellers Pvt Ltd appealed against the order of the NFAC, Delhi, which confirmed the addition of Rs. 2,25,68,159 as unexplained cash deposit under section 68 of the Income Tax Act, 1961, for the assessment year 2017-18. The addition was initially made by the Assessing Officer after noticing substantial cash deposits during the demonetization period, which the assessee could not satisfactorily explain. The CIT(A) upheld this addition. The Tribunal, after considering the arguments and the circumstances, decided to reduce the addition to Rs. 2,00,000, emphasizing that this decision should not set a precedent. Furthermore, it was directed that the addition be taxed under normal provisions, not under section 115BBE, aligning with the Madras High Court's decision in a similar case.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 828716 (ITAT-NEW DELHI)
• Duration Of Justice: 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Delhi
• Assessment Year: misc
• Appeal Filed On: 06-06-2025
• 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 HANSRA
• Assessee Lawyers: KARNIK RAJAT
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘F’ BENCH, NEW DELHI BEFORE SHRI YOGESH KUMAR US, JUDICIAL MEMBER, AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 3754/DEL/2025 [A.Y 2017-18] Gandaram & Sons Jewellers Pvt Ltd Vs. The A.C.I.T. I-1, Central Market Road Circle -10(1) Lajpat Nagar, Part – 2 New Delhi New Delhi PAN: AACCG 1177B (Applicant) (Respondent) Assessee By : Shri Karnik Rajat, Adv Department By : Ms. Harpreet Kaur Hansra , Sr. DR Date of Hearing : 18.12.2025 Date of Pronouncement : 16.01.2026 ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:- This appeal by the assessee is preferred against the order of the NFAC, Delhi dated 26.05.2025 pertaining to A.Y 2017-18. Printed from counselvise.com ITA No. 3754/DEL/2025 [A.Y 2017-18] Gandadram & Sons Jewellers vs ACIT Page 2 of 5 2. The solitary grievance of the assessee arising out of 12 grounds of appeal is the addition of Rs. 2,25,68,159/- made by the Assessing Officer and confirmed by the ld. CIT(A) on account of unexplained cash deposit u/s 68 of the Act. 3. Briefly stated, the facts of the case are that the assessee filed its return of income for the year under consideration on 30.10.2017 declaring total income of Rs. 42,56,460/-. Thereafter, the case was selected for scrutiny through CASS. 4. During the course of assessment proceedings, the Assessing Officer noticed that the assessee had made cash deposits of Rs. 3,71,42,500/- in its bank account during demonetization period i.e. from 09.11.2016 to 30.12.2016. As the assessee could not explain the nature and source and prove the genuineness of the amount of Rs. 2,79,01,079/- being cash transaction, the addition of an amount of Rs. 2,25,68,159/- (after giving credit of Rs. 53,32,920/- declared under the Income Declaration Scheme, 2016), was considered unexplained cash credit during demonetization period and added under section 68 of the Act. 5. Aggrieved, the assessee preferred an appeal before the CIT(A) who considering the facts and circumstances, upheld the action of the Assessing Officer. Now the further aggrieved assessee is in appeal before us. Printed from counselvise.com ITA No. 3754/DEL/2025 [A.Y 2017-18] Gandadram & Sons Jewellers vs ACIT Page 3 of 5 6. Before us, the ld. counsel for the assessee vehemently submitted that on total cash deposited during the period of demonetization in different bank accounts of the assessee company, the Assessing Officer made the addition without rejecting the books of account without there being any evidence and was made on the basis of conjectures and surmises. 7. Per contra, the ld. DR relied on the orders of the authorities below. 8. 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 period as being from sales. We also find that 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 of Rs. 2 lakhs 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 assessee’s ground on this count is partly allowed. Printed from counselvise.com ITA No. 3754/DEL/2025 [A.Y 2017-18] Gandadram & Sons Jewellers vs ACIT Page 4 of 5 9. 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. 10. In the result, appeal of the assessee in ITA No. 3754DEL/2025 is partly allowed. The order is pronounced in the open court on 16.01.2026. SD/- Sd/- [YOGESH KUMAR U.S.] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 16th JANUARY, 2026. VL/ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) Asst. Registrar, 5. DR ITAT, New Delhi Printed from counselvise.com ITA No. 3754/DEL/2025 [A.Y 2017-18] Gandadram & Sons Jewellers vs ACIT Page 5 of 5 Sl No. PARTICULARS DATES 1. Date of dictation of Tribunal Order 2. Date on which the typed draft order is placed before the Dictating Member 3. Date on which the typed draft order is placed before the other Member [in case of DB] 4. Date on which the approved draft order comes to the Sr. P.S./P.S. 5. Date on which the fair Order is placed before the Dictating Member for sign 6. Date on which the fair order is placed before the other Member for sign [in case of DB] 7. Date on which the Order comes back to the Sr. P.S./P.S for uploading on ITAT website 8. Date of uploading, inf not, reason for not uploading 9. Date on which the file goes to the Bench Clerk 10. Date on which the file goes for Xerox 11. Date on which the file goes for endorsement 12. The date on which the file goes to the Superintendent for checking 13. Date on which the file goes to the Assistant Registrar for signature on the order 14. Date on which the file goes to the dispatch section for dispatch the Tribunal order 15. Date of Dispatch of the Order 16. Date on which the file goes to the Record Room after dispatch the order Printed from counselvise.com "