NISHEETH BANSAL,NEW DELHI V. ASSISTANT COMMISIONER OF INCOME TAX, NEW DELHI

ITA 4098/DEL/2024

AI Insights

The case revolves around an appeal by Nisheeth Bansal against the order of the Commissioner of Income Tax (Appeals), which confirmed the addition of Rs.25,47,890 as unexplained cash deposits during the demonetization period in India. The Assessing Officer had initially made this addition, alleging that the cash deposits were unexplained. The assessee argued that these deposits were from legitimate cash sales, particularly during the Diwali festival season, and were duly recorded in audited books and corroborated by VAT returns. The department defended the addition, highlighting the timing and amount of the cash deposits post-demonetization. However, the Tribunal sided with the assessee, emphasizing the lack of defects in the audited books and the acceptance of the sales by the tax authorities.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 717563 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 05-09-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUDHA GUPTA
• Assessee Lawyers: S SANJAY AGGARWAL; SUMAKSH MAHAJAN
• Keywords: Set aside; Business income

Judgement Text

"आयकर अपीलीय अिधकरण िदʟी पीठ “एस एम सी”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं.4098/िदʟी/2024 (िन.व. 2017-18) ITA No.4098/DEL/2024 (A.Y. 2017-18) Nisheeth Bansal, Khasra No. 694, Land Mark Thana, Village, Alipur, Delhi 110036 ...... अपीलाथᱮ/Appellant PAN: BBBPB-4619-K बनाम Vs. Assistant Commissioner of Income Tax, Circle 35(1), Civic Centre, Minto Road, Delhi 110002 ..... ᮧितवादी/Respondent अपीलाथŎ Ȫारा/Appellant by : S/Shri Sanjay Aggarwal & Sumaksh Mahajan, Chartered Accountants ŮितवादीȪारा/Respondent by : Ms. Sudha Gupta, Sr.DR सुनवाई कᳱ ितिथ/ Date of hearing : 22/05/2025 घोषणा कᳱ ितिथ/ Date of pronouncement : : 14/08/2025 आदेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’] dated 11.07.2024, for Assessment Year 2017-18. 2. Shri Sanjay Aggarwal, appearing on behalf of the assessee submitted that the short issue in appeal is confirming of addition of Rs.25,47,890/- u/s. 68 of the Income Tax Act,1961(hereinafter referred to as ‘the Act’) on account of alleged unexplained cash deposits during demonetization period. Narrating facts of the case, he submitted that the assessee is engaged in trading of papers. Apart from business income, the assessee draws salary from partnership firm and has also Printed from counselvise.com 2 ITA No.4098/Del/2024 (AY 2017-18) income from property. The Assessing Officer (AO) during assessment proceedings made addition of Rs.25,47,890/- on account of unexplained cash deposits during demonetization. The assessee during assessment proceedings explained that cash deposits are from cash sales and earlier withdrawals from bank. Once the department has accepted sales, the cash deposits in bank which is from sales and has been offered to tax cannot be held to be unexplained. Aggrieved by the addition made by Assessing Officer, the assessee carried the issue in appeal before the CIT(A). The CIT(A) without appreciating the facts, confirmed the addition made by AO. The ld. AR submitted that just prior to declaration of demonetization there was festival season of Diwali. During Diwali season there is upswing in the sales including cash sales, therefore, cash deposits during the month of October and November 2016 was more as compared to the other months. The books of the assessee are duly audited and the Assessing Officer has accepted the same. The total sales of Rs.2,28,78,502/- included sales of Rs.25,47,890/- made in the month of October and November 2016. The ld. AR further submitted that the sales are also corroborated with VAT returns which have been accepted by the Sales Tax/VAT Authorities. He thus, prayed for deleting the addition. The ld. AR has also drawn attention of the Bench to invoices at page 225 to 239 of the paper book to show sample cash sales invoices. 3. Per contra, Ms. Sudha Gupta representing the department vehemently defended the impugned order and prayed for dismissing appeal of the assessee. The ld. DR submits that there were cash deposits to the tune of Rs.18,00,000/- and Rs.16,00,000/- in the month November and December 2016, respectively i.e. immediately after declaration of demonetization. In the rest of year there were no cash deposits except minor cash deposit of Rs.7,500/- in the month of Printed from counselvise.com 3 ITA No.4098/Del/2024 (AY 2017-18) October. She further pointed that as against cash sales of Rs.25,47,890/- the assessee has deposited cash of Rs.34,00,000/-. She further stated that there is no uniform pattern of cash deposits in the bank account from alleged cash sales. 4. Both sides heard, orders of the authorities below examined. The solitary issue raised by the assessee in appeal is addition of Rs.25,47,890/- u/s. 68 of the Act on account of unexplained cash deposits in the bank account of the assessee during demonetization period. The ld. Counsel for the assessee contended that the cash deposits are from cash sales and the total sales have been duly recorded in the books of assessee and the books are audited. The AO has not pointed any defect in the books. Thus, no addition could have been made on account of cash deposits from cash sales. The facts narrated by the assessee remain un-rebutted. Considering entire facts of the case, I find merit in the submissions of the assessee, hence, addition of Rs.25,47,890/- on account of unexplained cash deposits is directed to be deleted. 5. In the result, impugned order is set aside and appeal of the assessee is allowed. Order pronounced in the open court on Thursday the 14th day of August, 2025. Sd/- Sd/- (VIKAS AWASTHY) ᭠याियक सद᭭य/JUDICIAL MEMBER िदʟी/Delhi, ᳰदनांक/Dated 14 /08/2025 NV/- Printed from counselvise.com 4 ITA No.4098/Del/2024 (AY 2017-18) ᮧितिलिप अᮕेिषतCopy of the Order forwarded to : 1. अपीलाथᱮ/The Appellant , 2. ᮧितवादी/ The Respondent. 3. The PCIT/CIT(A) 4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी 5. गाडᭅ फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar) ITAT, DELHI Printed from counselvise.com "