INCOME TAX OFFICER, NEW DELHI V. BIMAL JEWELLERS, DELHI

ITA 2115/DEL/2024

AI Insights

The case involves an appeal by the Income Tax Officer against Bimal Jewellers concerning the addition of Rs. 1,63,57,462 under section 68 of the Income Tax Act, which was deleted by the Ld. CIT(A). The addition was initially made by the Ld. AO based on a comparative analysis of cash deposits and sales before and during the demonetization period. The Tribunal upheld the CIT(A)'s decision, noting that the AO had not adequately questioned the genuineness of the sales, and the addition was based on conjecture rather than concrete evidence.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 31037 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH TRIPATHI
• Assessee Lawyers: RAJAT GARG; ASHU GARG
• Section: 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: ‘A’: NEW DELHI) BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER ITA No:- 2115/Del/2024 (Assessment Year- 2017-18) Income Tax Officer, New Delhi. Vs. Bimal Jewellers, Delhi. PAN No: AAAFB2926J APPELLANT RESPONDENT Revenue by : Shri Ashish Tripathi, Sr. DR Assessee by : Shri Rajat Garg, CA & Shri Ashu Garg, CA Date of Hearing : 10.03.2025 Date of Pronouncement : 12.03.2025 ORDER PER AMITABH SHUKLA, AM: This appeal by Revenue is directed against the order of National Faceless Appeal Centre, Delhi [for short hereinafter referred to as the “(Ld. CIT(A)”] dated 04.03.2024 for Assessment Year 2017-18. 2. The only issue in this appeal of Revenue is regarding the action of Ld. CIT(A) and deleting the addition of Rs. 1,63,57,462/- made by the Ld. AO u/s 68 of the Act. The Ld. Counsel for the assessee, ITA No.- 2115/Del/2024 Bimal Jewellers Page 2 of 5 supporting the order of Ld. CIT(A), informed that the principal controversy seminal to the appeal is cash deposit made by the assessee during the demonetization period. As per the brief factual matrix of the case the assessee is engaged in the business of sale purchase of gold. As per information available in ITBA applications, the assessee has deposited cash in his bank account of Rs. 2,19,60,000/-, out of which Rs. 1,97,00,000/- was deposited during the demonetization period in its two bank accounts maintained with HDFC Bank and Bank of Baroda. Relevant findings are available on page 4 of the order of the Ld. AO. The Ld. Counsel submitted that Ld. AO made a comparative analysis of cash deposits made in F.Ys. 2015-16 and 2016-17, so as to allude towards huge variation in cash sales. The Ld. AO noted that the cash sales before commencement of demonetization was significantly high raising doubts towards its justified sources. The Ld. Counsel submitted that as evident from para 8 to 8.3 of his order on pages 23 to 26 of the Ld. AO, conclusions were drawn qua lack of genuineness of the cash sales made from 01.10.2016 to 08.11.2016. The AO, therefore, proceeded to make an addition of Rs. 1,63,57,462/-. The Ld. Counsel submitted that, Ld. First Appellate Authority has comprehensively analysed the matter ITA No.- 2115/Del/2024 Bimal Jewellers Page 3 of 5 in para 7.2.14 to para 7.2.19 from pages 87 to 90 of his order before deleting the impugned additions. The Ld. DR would like to place reliance upon the order of Ld. Assessing Officer. 3. We have heard the rival submissions in the light of material available on record. It is an undisputed fact of this case that the sales of the assessee, prior to commencement of demonetization period w.e.f. 08.11.2016, has shown significant increase both in comparison to earlier years as well as period post 08.11.2016. We have also noted that the cash generated from the sales has been immediately deposited by the assessee in its bank account. The order of the Ld. AO is totally silent as to whether any doubt was raised qua genuineness of the sales. Now once, the genuineness of the sales has been accepted, the cash generated from such sales cannot be a subject matter of any inquiry or addition. In case, the AO doubted the genuineness of the sales, then he ought to have re-casted the entire trading results. The assessee had also provided to the AO details of parties to whom sales were made. We have also noted that while making the impugned addition, the Ld. AO has devised, evident from page 24 and 25 of his order, some alogrithem to estimate ITA No.- 2115/Del/2024 Bimal Jewellers Page 4 of 5 average sales of 39 days, while making the impugned addition. Thus, the addition per se is based upon a conjecture and surmises of the AO. Accordingly, we are of the considered view that there is no case for any interference with the order of Ld. CIT(A) at this stage. The order of Ld. CIT(A) is therefore confirmed and all the grounds raised by the Revenue are dismissed. 4. In the result, appeal of the revenue is dismissed. Order pronounced in the Open Court on 12.03.2025 Sd/- Sd/- (VIKAS AWASTHY) (AMITABH SHUKLA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 12/03/2025. Pooja/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI ITA No.- 2115/Del/2024 Bimal Jewellers Page 5 of 5 1. Date of dictation of Tribunal order 10.03.25 Direct 2. Date on which the typed draft Tribunal Order is placed before the Dictating Member 10.03.25 3. Date on which the typed draft Tribunal order is placed before the other Member 4. Date on which the approved draft Tribunal order comes to the Sr. PS/PS 5. Date on which the fair Tribunal order is placed before the Dictating Member for pronouncement 6. Date on which the signed order comes back to the Sr.PS/PS 7. Date on which the final Tribunal order is uploaded by the Sr.PS/PS on official website 8. Date on which the file goes to the Bench Clerk alongwith Tribunal order 9 Date of killing off the disposed of files on the judisis Portal of ITAT by the Bench Clerks 10. Date on which the file goes to the Supervisor (Judicial) 11. The date on which the file goes to the Assistant Registrar for endorsement of the order 12. Date of Despatch of the order "