SANDHYA SHARMA,NEW DELHI V. ACIT, CENTRAL CIRCLE-14, NEW DELHI

ITA 1603/DEL/2023

AI Insights

The case involves Sandhya Sharma, the appellant, who contested the addition of Rs. 56,00,000 to her income, deemed as unexplained money under section 69A of the Income Tax Act, 1961, by the Assessing Officer (A.O.) and upheld by the Commissioner of Income Tax (Appeals) - 28, New Delhi. The appellant argued that the cash deposits were from legitimate sales, which were already taxed, and thus should not be considered unexplained. The Departmental Representative countered that the sales were suspicious, occurring just before demonetization, and lacked proper documentation. The Tribunal, after reviewing the evidence, including sales invoices and VAT returns, concluded that the additions made were erroneous and amounted to double taxation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314363 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAHIL KUMAR BANSAL
• Assessee Lawyers: LALIT MOHAN; ANKIT
• Keywords: Bogus
• Section: 143(3)

Judgement Text

" 1 ITA No. 1603/Del/2023 Sandhya Sharma Vs. ACIT IN THE INCOME TAX APPELLATE TRIBUNAL DELHI (DELHI BENCH ‘G’ NEW DELHI) BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No. 1603/Del/2023 (A.Y. 2017-18) Sandhya Sharma 1168, KuchMahajani , ChandniChowk, Delhi PAN: AJTPS6309N Vs. ACIT Central Circle-14 New Delhi Appellant Respondent Assessee by CA Lalit Mohan and Advocate Ankit Kumar Revenue by Sh. Sahil Kumar Bansal, Sr. DR Date of Hearing 16/04/2025 Date of Pronouncement 07/05/2025 ORDER PER YOGESH KUMAR, U.S. JM: The present appeal is filed by the Assessee against the order of the Commissioner of Income Tax (Appeals)-28- New Delhi (‘Ld. CIT(A)’ for short) dated 18/04/2023 pertaining to Assessment 2017-18. 2. Brief facts of the case are that, the Assessee filed return of income declaring income at Rs. 24,43,510/-. The case of the Assessee was selected for scrutiny, anassessment order came to be passed u/s 143(3) of the Income Tax Act, 1961 (‘Act’ for short) by making an addition of Rs. 2 ITA No. 1603/Del/2023 Sandhya Sharma Vs. ACIT 56,00,000/-on account of unexplained money u/s 69A of the Act. Aggrieved by the assessment order dated 31/12/2019, the Assessee preferred an Appeal before the Ld. CIT (A). The Ld. CIT(A) vide order dated 18/04/2023, dismissed the Appeal filed by the Assessee by confirming the addition made by the A.O. As against the order of the Ld. CIT(A) , the Assessee preferred the present appeal. The Ld. Assessee's Representative submitted that the Assessee is not pressing the Ground regarding the DIN, accordingly additional Ground of appeal regarding the issue of DIN is hereby dismissed as not pressed. 3. The Ld. Counsel for the Assessee submitted that the authorities below have accepted cash sales and taxed the income thereon, however, made the erroneous addition of cash deposits as unexplained income u/s 69A of the Act. Further submitted that the sales are duly recorded in the books of accounts and have been made out of stock available in the books of account. Once purchases declared in the books of account were duly accepted, then no presumption could be drawn that such purchases were unexplained. Further submitted that in all the sales made by the Assessee, VAT was duly paid and was reflected in the books of account and VAT return filed by the Assessee. The Assessee has produced all the documents to prove the genuineness of the sales made by the Assessee. The Ld. Assessee's Representative also submitted that 3 ITA No. 1603/Del/2023 Sandhya Sharma Vs. ACIT the cash deposits made by the Assessee for the year under consideration are very less compare to the cash deposits made for Assessment Year 2016-17. The Ld. Counsel further submitted that once the cash sales are taxed, then taxing the cash deposit again amounting to double taxation of income, thus sought for deletion of the addition. 4. Per contra, the Ld. Departmental Representative submitted that there have been negligible cash sales were made by the Assessee during the relevant Financial Year. Out of total cash sales of Rs. 1,03,76,984/- made during the year, cash sales of Rs. 56,09,301/- were made only on two dates i.e. 05/11/2016 and 06/11/2016 which is just before demonetization date i.e 08/11/2016. The Assessee recorded sales of silver goods and the value of the each of the bills were above 90,00,000/- and below to Rs. 1,00,000/-. Ld. Department's Representative drawing attention tothe 59 invoices date 05/11/2016 and 07/11/2016 submitted that at no stretch of imagination, it is possible that all the customers demanded the same quality of the silver on those two days. Further submitted that the Ld. CIT(A) has specificallygivenfinding that the Assessee created bogus bills/invoices of cash sales wherein no name, mobile number, address, PAN Number of the parties to whom the sales were made are mentioned. The Assessee created those bogus bills deliberately to bring unaccounted 4 ITA No. 1603/Del/2023 Sandhya Sharma Vs. ACIT cash in the books. Further submitted that in so far as cash receipts for Assessment Year 2016-17 is concerned, the issue was pending before the Tribunal and appeal of the Assessee was allowed by the Tribunal on the ground of granting the approval and not decided on the merits of the case, therefore, the Ld. Departmental Representative submitted that appeal of the Assessee deserves to be dismissed. 5. We have heard both the parties and perused the material available on record. The Assessee deposited cash in its bank accounts amounting to Rs. 56,00,000/- during the demonization i.e. from 09/01/2016 to 30/12/2016,addition has been made by treatingthesaid amount as unexplained money and added to the total income of the Assessee u/s 69A of the Act. The Ld. CIT(A) confirmed the said addition on the ground that the Assessee has created bogus bills to bring the unaccounted cash in the books. It was the case of the Assessee that the source of the cash was the sales made by the Assessee during the Financial Year 2016-17relevant to Assessment Year 2017-18. To substantiate the said claim, the Assessee produced the sales invoices, sale receipt and the Assessee has also paid VAT on each sales and the sales were duly reflected in the books of account VAT return. Further the sales as made by the Assessee which are duly reflected in the cash books and sales account, which can be 5 ITA No. 1603/Del/2023 Sandhya Sharma Vs. ACIT corroborated from page 641-739 of the Paper Book. The said sales of the Assessee are supported by sale bills and the availability of stock which are duly reflected in the stock register maintained by the Assessee Company. The Revenue Authorities have not disputed the availability of stock at any point of time. Apart from the same, it is found that the cash sale for the year under consideration is much less than the cash sales and cash deposits made for the Assessment Year 2016-17. The said details are as under:- A.Y Cash sales Cash Deposit 2016-17 Rs. 21,03,97,670 21,07,78,000 2017-18 1,02,73,800 Rs.96,00,000 6. The Ld. Departmental Representative submitted that, the above comparison of the year under consideration i.e. 2017-18 and 2016-17 will go against the Assessee as there was addition of Rs. 11,l2,37,624/- was made on account of bogus sales made by the Assessee and held to be unaccounted money and brought to tax u/s 69A r.w. Section 115PBE of the Act. We have gone through the order of the Tribunal for Assessment Year 2017-18. It is found that there was no addition made on account of cash deposit for Assessment Year 2016-17 and the entire cash deposited for Assessment Year 2016-17 has been accepted and treated as sales of the Assessee. We have considered the nature of the 6 ITA No. 1603/Del/2023 Sandhya Sharma Vs. ACIT business of the Assessee and also past history of cash sales and the cash deposit in the bank account. The entire sales made by the Assessee are reflected in the cash book and sales account which are supported by documentary evidence maintained in ordinary course by the Assessee and at no point of time, the stock register maintained by the Assessee has been disputed. The audited books of account of the Assessee were accepted and sales which are duly reflected in the books of account are offered for taxation by reflecting the same in the trading and profit and loss account of the Assessee. Thus, in our considered opinion the Lower authorities committed error in making/ addition on account of cash deposit arising out of the sale proceeds and the same will amounts to double taxation. Considering the above facts and circumstances, we find no reason to sustain the addition made by the A.O. which has been upheld by the Ld. CIT(A). Accordingly the impugned addition is hereby deleted. 7. In the result, the Appeal of the Assessee is allowed. Order pronounced in the open court on 07th May, 2025 Sd/- Sd/- (MANISH AGARWAL) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 07.05.2025 R.N, Sr.P.S* 7 ITA No. 1603/Del/2023 Sandhya Sharma Vs. ACIT Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "