SURENDER KUMAR SHARMA THROUGH LEGAL HEIR UMA SHARMA,SHIMLA V. THE ASSTT. COMMISSIONER OF INCOME TAX , DCIT/ACIT CIRCLE

ITA 463/CHANDI/2024

AI Insights

The case involves an appeal by the late Shri Surender Kumar Sharma, represented by his legal heir Smt. Uma Sharma, against the order of the Commissioner of Income Tax (Appeals) which confirmed the assessment made by the Assessing Officer for the Assessment Year 2017-18. The assessment was primarily concerned with verifying cash deposits made during the demonetization period. The Assessing Officer had added a differential amount as unexplained cash credit under section 68 of the Income Tax Act, 1961, which the Tribunal later found to be arbitrary and without basis, leading to the allowance of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 361167 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR LD.
• Assessee Lawyers: ROHIT JAIN LD
• Keywords: Unexplained cash credit
• Section: 143(3); 68

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH BEFORE HON’BLE SHRI LALIET KUMAR, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं. / ITA No.463/CHANDI/2024 (िनधाŊरणवषŊ / Assessment Year: 2017-18) Late Shri Surender Kumar Sharma Through L/H Smt. Uma Sharma HS filling Station Khaneri, Rampur Bushahr Shimla - 172001 बनाम/ Vs. ACIT The Mall Shimla - 172001 ̾थायीलेखासं./जीआइआरसं./PAN/GIR No.AGXPS-4748-J (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Shri Rohit Jain (Advocate) – Ld. AR ŮȑथŎकीओरसे/Respondent by : Dr Ranjit Kaur (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 21-05-2025 घोषणाकीतारीख /Date of Pronouncement : 21-05-2025 आदेश / O R D E R PER LALIET KUMAR, J.M. 1. Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of an order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 30-03-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 04-12-2019. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. 2 2. The deceased assessee e-filed its return of income for Rs.56.85 Lacs which was subjected to scrutiny to verify cash deposit during demonetization period. The assessee was running a petrol pump at Khaneri, Rampur, Distt. Shimla. In support of deposits, the assessee furnished audit report, financial statements, daily cash book, ledger accounts etc. and various other information / documents. It was noted by Ld. AO that the assessee deposited cash of Rs.392.86 Lacs between 10-11-2016 to 31-12-2016 out of which an amount of Rs.199.32 Lacs was deposited in Specified Bank Notes (SBNs). The assessee stated that it had cash-in-hand as on 11-11-2016 for Rs.36 Lacs which was sourced to make deposits in the bank accounts. The Ld. AO further noted that the assessee deposited cash of Rs.10.61 Lacs on 08-11-2016 and another Rs.14.49 Lacs as on 07-11-2016 which would show that sales for 06-11-2016, 07-11-2016 and part sales of 08-11-2016 were deposited. Considering the earlier cash balances, cash-in-hand for Rs.46.50 Lacs as on 10-11-2016 was accepted. The average sales on 11-11-2016 could be accepted for Rs.14 Lacs whereas the assessee deposited cash of Rs.36 Lacs on 11-11-2016 which was not tenable and held to be excessive. Accordingly, the differential of the two i.e., Rs.22 Lacs was added as unexplained cash credit u/s 68 and the assessment was finalized. The Ld. CIT(A) confirmed the assessment against which the assessee is in further appeal before us. 3. Upon perusal of factual matrix, the undisputed fact that emerges is that the assessee has sufficient cash balances as per his cash book 3 whenever the impugned deposits have been made. The sales turnover has been accepted by Ld. AO. The books have not been rejected and no deficiency has been pointed out in the cash book of the assessee. The business model of the assessee is such that is carries out substantial sales in cash. The estimation of average sales on 11-11- 2016 is quite arbitrary and without any basis whereas the overall sales turnover has not been disturbed by Ld. AO. On these facts, the impugned additions do not have any legs to stand. By deleting the same, we allow the appeal of the assessee. 4. The appeal stand allowed. Order pronounced on 21-05-2025. Sd/- Sd/- (MANOJ KUMAR AGGARWAL) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 21-05-2025. आदेश की Ůितिलिप अŤेिषत / Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT CHANDIGARH "