SUDESH JAIN,PROP. OF GAURAV TRADING COMPANY V. INCOME TAX OFFICER, WARD-4, AMBALA

ITA 115/CHANDI/2025

AI Insights

The case involves Shri Sudesh Jain, an individual engaged in the wholesale and retail sale of sugar, edible oil, and other food grains, who appealed against the order of the Commissioner of Income Tax (Appeals) confirming an addition of Rs.63,41,000 to his income for the assessment year 2017-18. The addition was initially made by the AO, suspecting that the deposits made during the demonetization period were from unexplained cash. The Tribunal, after reviewing the records and considering the nature of the assessee's business, found that the AO had not adequately analyzed the business's cash flow and stock position, leading to the decision to allow the appeal and delete the addition.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 784161 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Appeal Filed On: 22-01-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR
• Assessee Lawyers: DHRUV GOEL
• Section: 68

Judgement Text

"आयकर अपीलȣय अͬधकरण,चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘B’ CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 115/CHD/2025 Ǔनधा[रण वष[ / Assessment Year: 2017-18 Shri Sudesh Jain, C/o Rajiv Goel & Associates 179, Bank Road, Ambala Cantt. Vs The ITO, Ward – 4, Ambala. èथायी लेखा सं./PAN NO: AEVPJ6699B अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent Assessee by : Shri Dhruv Goel, CA Revenue by : Dr. Ranjit Kaur, Addl. CIT Sr.DR Date of Hearing : 09.10.2025 Date of Pronouncement : 12.11.2025 PHYSICAL HEARING O R D E R PER RAJPAL YADAV, VP The assessee is in appeal before the Tribunal against the order of the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 27.11.2024 passed for assessment year 2017-18. 2. The assessee has taken six grounds of appeal, however, his grievance revolves around a single issue, namely, ld.CIT Printed from counselvise.com ITA No.115/CHD/2025 A.Y.2017-18 2 (Appeals) has erred in confirming the addition of Rs.63,41,000/- which was added by the AO with the aid of Section 68 of the Income Tax Act and charged the tax at a higher rate u/s 115BBE of the Income Tax Act. The rest of the grounds are peripheral arguments to this central point. 3. The brief facts of the case are that assessee is an individual engaged in wholesale and retail sale of sugar, edible oil and other foodgrains range. He has filed his return of income on 31.10.2017 electronically declaring total income at Rs.3,91,250/-. The case of the assessee was selected for scrutiny assessment and notices were issued u/s 143(2)/142(1) of the Act respectively. The AO was of the view that during demonetization period, assessee has deposited a sum of Rs.68,35,000/-. Therefore, he was of the view that such deposit was made out of unexplained cash available with the assessee. He only given credit of Rs.4,60,000/- representing the cash sales made by the assessee. Accordingly, an addition of Rs.63,41,000/- was made to the total income of the assessee. The appeal to the CIT (Appeals) did not bring any relief to the assessee. Printed from counselvise.com ITA No.115/CHD/2025 A.Y.2017-18 3 4. With the assistance of the ld. Representative, we have gone through the record carefully. A perusal of the record would indicate that assessee has sufficient stock which was sold by him and out of the sale proceeds, deposits have been made. The ld. Revenue Authorities have not analytically examined the facts and circumstances of the case nor the stock position available with the assessee as on 01.04.2016 vis-a-vis 31.03.2017. The AO has only made an analysis of the cash position during the demonetization period whereas he ought to have taken a holistic picture of the whole year and then work out whether any extra cash was available with the assessee or not. The AO has read the details halfheartedly and unnecessarily created an artificial bifurcation of the business undertaken during the period. Therefore, we are of the view that assessee has made sales during the year in cash and assessee's cash balance is being deposited in the account. The assessee was even eligible to make cash sales during demonetization period because he was dealing in edible oil, sugar and grain items. Accordingly, we allow the ground of Printed from counselvise.com ITA No.115/CHD/2025 A.Y.2017-18 4 appeal and delete the addition of Rs.63,41,000/- made by the AO. 5. In the result, appeal of the assessee is allowed. Order pronounced on 12 th November,2025. Sd/- Sd/- (MANOJ KUMAR AGGARWAL) (RAJPAL YADAV) ACCOUNTANT MEMBER VICE PRESIDENT “Poonam” आदेश कᳱ ᮧितिलिप अᮕेिषत/ Copy of the order forwarded to : 1. अपीलाथᱮ/ The Appellant 2. ᮧ᭜यथᱮ/ The Respondent 3. आयकर आयुᲦ/ CIT 4. िवभागीय ᮧितिनिध, आयकर अपीलीय आिधकरण, च᭛डीगढ़/ DR, ITAT, CHANDIGARH 5. गाडᭅ फाईल/ Guard File सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "