INCOME TAX OFFICER, NEW DELHI V. SUKAM JEWELLERS PVT LTD, NEW DELHI

ITA 4040/DEL/2024

AI Insights

The case involves an appeal by the Income Tax Officer against Sukam Jewellers Pvt Ltd concerning the assessment order for the year 2017-18. The primary issue was the addition of Rs. 2,31,00,000 under section 68 of the Income Tax Act, 1961, which the CIT(A) later deleted. The addition was initially made by the Assessing Officer (AO) due to the company's failure to satisfactorily explain the source of cash deposits made during the demonetization period. The company claimed these were sales proceeds, which the AO found implausible given the timing of the deposits. However, the CIT(A) accepted the company's explanation, leading to the Revenue's appeal. The Tribunal's decision to dismiss the appeal was based on the inadequacy of the Revenue's arguments against the CIT(A)'s detailed findings.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 834515 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2026
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2017-2018
• Appeal Filed On: 02-09-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANISH GUPTA
• Section: 143(3); 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘G’: NEW DELHI BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER ITA No.4040/Del/2024 [Assessment Year: 2017-18] Income Tax Officer, Room No.238B, 2nd Floor, C.R. Building, I.P. Estate, Delhi-110002 Vs. Sukam Jewellers Pvt Ltd. S-55, Greater Kailash Part-1, Delhi-110048 PAN :AATCS2709N (Appellant/Revenue ) (Respondent/Assessee) Appellant/Revenue by Shri Manish Gupta, Sr. DR Respondent/Assessee by None Date of Hearing 10.11.2025 Date of Pronouncement 06.02.2026 ORDER PER KRINWANT SAHAY, AM: Appeal in this case has been filed by the Revenue against the order dated 08.07.2024 passed by ld. Commissioner of Income Tax(Appeals)/National Faceless Appeal Center, New Delhi, against the assessment order dated 29.12.2019 passed under section 143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’) pertaining to Assessment Year 2017-18. 2. Grounds of appeal raised by the Revenue are as under:- “1. That on the facts and circumstances of the case, Ld. CIT(A) has erred in deleting the addition of Rs. 2,31,00,000/- made u/s 68 of the IT, Act, without appreciation the finding of the AO as assessee Printed from counselvise.com ITA No.4040/Del/2024 Page 2 of 3 failed to produce the supporting documents in support of its claim for cash deposits during demonetization period during assessment proceedings. 3. Brief facts of the case as given in the order of the ld. CIT(A) are as under:- 3. The brief facts of the case are that the appellant company filed its return of income for the assessment year under reference declaring total income of Rs.15,13,486/-. Subsequently, the case was selected for scrutiny under CASS and statutory notice under section 143(2) of the Income Tax Act, 1961 was issued on 21.09.2018 and duly served upon the assessee through ITBA portal as well as through speed post. Statutory notice under section 143(2) of the Act was also served upon the assessee through email. Immediately after the announcement of scheme of demonetization on 08.11.2016 at 08:00 PM by the Prime Minister of India, the appellant company had deposited cash amounting to Rs.2,31,00,000/- into its bank account number 35748542648 maintained with State Bank of India. During the assessment proceedings, the Assessing Officer (hereinafter referred as ‘AO’) asked the appellant to explain source of cash deposited by the assessee company into its bank account during the period of demonetization along with certain other queries related to the issue of cash deposited by the assessee company in its bank account. In response, the appellant has explained that the source of cash deposited was cash in hand on 09.11.2016. It is the stand of the assessee company that cash, amounting to Rs.2,31,00,000/-, deposited by it into bank account maintained with State Bank of India represents its sale proceeds. It is also explained with the help of cash book for the period 08.11.2016 to 29.12.2016 that the assessee company had made a total cash sales of Rs.2,30,94,761/- on 08.11.2016 itself. The AO did not accept the explanation provided by the appellant holding that it is not practically possible to make sale of Rs. 2,30,94,761/- within time period of 4 hours after declaration of demonetization at 8:00 PM on 08.11.2016. Accordingly, the AO made addition u/s 68 of the Income Tax Act, 1961. Aggrieved by the impugned assessment order the appellant is in present appeal. 4. Per Contra, ld. DR relied upon the order of the Assessing Officer. 5. We have considered the findings given by the Assessing Officer in the assessment order and the ld. CIT(A) in the appellate order. We find that the ld. CIT(A) has given very details finding on this issue. During proceedings Printed from counselvise.com ITA No.4040/Del/2024 Page 3 of 3 before us, the Revenue could not rebut the findings given by the ld. CIT(A). Therefore, we find no reason to interfere in the findings given by the ld. CIT(A). Accordingly, ground raised by the Revenue is dismissed. 6. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 06th February, 2026. Sd/- Sd/- [MAHAVIR SINGH] [KRINWANT SAHAYA] VICE PRESIDENT ACCOUNTANT MEMBER Dated 06.02.2026 f{x~{tÜ f{x~{tÜ f{x~{tÜ f{x~{tÜ Copy forwarded to: 1. Assessee 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi, Printed from counselvise.com "