INCOME TAX OFFICER, LUDHIANA V. ANUP BANSAL, LUDHIANA

ITA 671/CHANDI/2024

AI Insights

The case involves an appeal by the Income Tax Officer, Ward-1(5), Ludhiana against Sh. Anoop Bansal concerning the assessment year 2017-18. The primary issues in the appeal were the deletion of additions made by the Assessing Officer which included disallowances of freight and inward cartage charges under section 37, and unexplained cash credits under section 68 during the demonetization period, taxed under section 115BBE. The CIT(A) had deleted these additions, finding them unjustified, which led to the Revenue's appeal to the Tribunal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 774965 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Appeal Filed On: 31-05-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GE E TINDERMANN
• Keywords: Corroborative evidences; Unexplained cash credit
• Section: 68; 37

Judgement Text

"आयकर अपीलȣय अͬधकरण, चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, ‘A’, CHANDIGARH BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER & SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 671/CHD/2024 Ǔनधा[रण वष[ / Assessment Year : 2017-18 The ITO, Ward-1(5), Ludhiana बनाम Vs. Sh. Anoop Bansal, Motia Marvel, Barewal Road, Backside, Gurudev Hospital, Ludhiana èथायी लेखा सं./ PAN NO: AHGPB5674C अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent ( PHYSICAL HEARING ) Ǔनधा[ǐरती कȧ ओर से/Assessee by : None राजèव कȧ ओर से/ Revenue by : Smt. Geetinder Mann, CIT DR सुनवाई कȧ तारȣख/Date of Hearing : 16.07.2025 उदघोषणा कȧ तारȣख/Date of Pronouncement : 01.09.2025 आदेश/Order Per Krinwant Sahay, AM : Appeal in this case has been filed by the assessee against the order dated 09.04.2024 passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for A.Y. 2017-18. 2. Grounds of appeal are as under: 1. That the Ld. CIT(A), Ludhiana erred in law, in deleting addition of Rs. 19,48,356/- (Rs. Printed from counselvise.com 671-Chd-2024 Anup Bansal, Ludhiana 2 4,10,704/- as inward cartage Plus Rs. 15,37,652/- as Freight inward ) made by the Assessing Officer on account of disallowance u/s 37 of the I.T. Act, 1961 as the assessee claimed freight & inward cartage are in- genuine. 2. That the Ld. CIT(A), Ludhiana erred on facts and law, in deleting addition of Rs. 4,69,65,500/- as unexplained cash credit u/s 68 of the IT. Act, 1961 and taxed as per provision of section 115BBE of the Act as the source of unexplained cash credit during the demonetization period amounting to Rs. 4,69,65,500/- as explained by the assessee from cash sale is not acceptable as the cash sale for the month of October 2016 seems to be in-genuine. 3. That the appellant craves leave to add or amend any ground of appeal before it is finally disposed off. 3. Brief facts of the case, as per the order of the Ld. CIT(A) are as under:- During the year under consideration, the assessee, an individual, was engaged in trading of fabric Customers from all over the Punjab use to come to Ludhiana for making purchases as per their Printed from counselvise.com 671-Chd-2024 Anup Bansal, Ludhiana 3 requirements. Most of these customers make purchases in cash. It is the normal practice of the assessee to sell his products in cash as well as on credit. During the financial year 2015-2016 the assessee had made total cash sale of Rs. 14,07,37,127.00. Accordingly, his average monthly cash sale was Rs. 1,17,28,093.92 per month during the financial year 2015-2016. Further the assessee had cash sales of Rs. 2.42 crore and Rs. 2.70 crore during January 2016 and February 2016 respectively. During the financial year 2016-2017, the assessee made a cash sale of Rs. 5.60 Crore during the period 01.10.2016 to 08.11.2016. Rs. 4.70 crore approx. were deposited by the assessee in his bank accounts during the period 09.11.2016 to 31.12.2016. Return of the assessee was selected for scrutiny under section 143 of the Income Tax Act, 1961. Suspecting the above-mentioned cash sale of the assessee amounting to Rs. 5.60 Crore and cash deposit of Rs. 4.70 Crore during 09.11.2016 to 31.12.2016, the Ld. AO made an addition, (u/s 68 of the Income Tax Act, 1961), of Rs. 4,69,65,500/- Printed from counselvise.com 671-Chd-2024 Anup Bansal, Ludhiana 4 to the returned income of the assessee and taxed as per the provisions of section 115BBE of the Act. A demand notice of Rs. 4,95,62,968/- u/s 156 of the income Tax Act, 1961 has been issued to the assessee. 4. Appeal on ground No.1 is against the deletion of Rs. 19,48,356/- (Rs. 4,10,704/-) as inward charges plus Rs. 15,37,652/- as freight inward. On this issue, the Ld. CIT(A) has given his findings in the appellate order as under: - “I have considered the submission of the appellant and gone through the AO's observation & decision in assessment order. I do not find any merit in the observation and decision of the AO in this regard and in as much as no adverse view was taken by the AO for cash deposited other than that of demonetization period and the appellant's total cash sale of Rs. 1,75,43,493/- for the financial year 2016-17 excepting Month of October and November 2016, was accepted by the AO. If the said cash sale is accepted, at least relevant carriage and freight inward should be allowed. Moreover no proposal of addition in this regard was communicated to the appellant in show cause notice sued by the AO. Accordingly, I am of opinion that the AO's order i.e. addition of Rs. 19,48,356/- (Rs 4,10,704/- + 15,37,652/-) is contrary to law and not at all justified and uncalled for. In view of discussion thereof I Printed from counselvise.com 671-Chd-2024 Anup Bansal, Ludhiana 5 hold that the addition of Rs.19,48,356/-made u/s 37 of the I.T Act is not in accordance with law and stand deleted. These grounds are therefore allowed.” 5. Per contra, the Ld. DR relied on the order of the Assessing Officer. 6. We have considered the findings given by the authorities below on this issue and we find that the details on this issue brought on record by the Ld. CIT(A) are convincing and logical. Therefore, in our view, there is no need to make any interference in the findings given by the ld. CIT(A) on this issue. Accordingly, Revenue’s appeal on this issue is dismissed. 7. Appeal on ground No.2 is against the addition of Rs. 4,69,65,500/- as unexplained cash credit u/s 68 of the Income Tax Act, 1961 and taxed as per the provisions of section 115BBE of the Act as the source of unexplained cash credits during the demonetization period amounting to Rs. 4,69,65,500/-. Printed from counselvise.com 671-Chd-2024 Anup Bansal, Ludhiana 6 8. On this issue, the Ld. CIT(A) in the appellate order has given his findings as under:- “I have considered the submission of the appellant and gone through the AO's observation & decision in assessment order. I find during the course of assessment, the AO despite issuing show cause notice proposing to reject books of accounts neither reject books of accounts nor detected any specific mistake in maintenance of books of accounts. Moreover the AO has stated in its assessment order that the appellant submitted a list of customers vide which customers name and Aadhaar card number/ driving license of the purchaser provided, through whom necessary verification regarding genuineness of transaction could have been verified. But without doing so and despite no adverse view was taken by the AO for cash deposited other than that of demonetization period, the AO made addition of Rs. 4,69,65,500/-without any sound basis and supporting evidence. Accordingly I find infirmity in the observation and decision of the AO in as much as the AO was unable to establish cash credit amount during demonetization being unexplained as far as section 68 of the I.T Act is concerned. Therefore I hold that the addition of Rs.4,69,65,500/-made u/s 68 of the I.T Act is not in accordance with law and stand deleted. These grounds are therefore allowed”. Printed from counselvise.com 671-Chd-2024 Anup Bansal, Ludhiana 7 9. Per Contra, the ld. DR relied on the order of the Assessing Officer. 10. We have considered the findings given by the Ld. CIT(A) on this issue. We find that during the year under consideration; the Assessee had made total cash sales of Rs. 14,07,37,127/-. The Assessing Officer has accepted the cash sales in other months of the year except the cash sales made during the demonetization period. The Ld. CIT(A)’s findings sems logical that if the books of account of the Assessee has not been rejected by the Assessing Officer and the cash sales made by the Assessee in other months of the year have been accepted, then there is no reason why the part of {cash sales) has been rejected by the Assessing Officer simply because these amounts were deposited in the bank account during the demonetization period. Neither during the assessment proceedings nor during the proceedings before us, the Revenue could bring anything on record to rebut the claim of the Assessee. Therefore, we find no reason to interfere in the findings Printed from counselvise.com 671-Chd-2024 Anup Bansal, Ludhiana 8 given by the Ld. CIT(A) on this issue. Accordingly, Revenue’s appeal on this issue is also dismissed. 11. In the result, Revenue’s appeal is dismissed. Order pronounced on 01.09.2025. Sd/- Sd/- ( LALIET KUMAR ) ( KRINWANT SAHAY) Judicial Member Accountant Member “आर.क े.” आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकर आयुÈत/ CIT 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड[ फाईल/ Guard File सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "