VIVEK CHOPRA,DELHI V. ITO WARD 49(3), DELHI

ITA 1128/DEL/2025

AI Insights

The case involves Vivek Chopra, a dealer of consumer electronic appliances, who appealed against the order of the NFAC which confirmed an addition of Rs. 44,95,000 as unexplained cash credit under Section 68 read with Section 115BBE of the Income Tax Act. The addition was based on cash deposits of Rs. 49,95,000 made during the demonetization period, which the Assessing Officer (AO) deemed unexplained. The NFAC partially allowed the appeal, reducing the addition to Rs. 44,95,000 after considering some deposits as explained. The Tribunal found that the assessee was not given a proper hearing at the NFAC level and thus restored the case to NFAC for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705967 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2025
• 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: DHEERAJ KUMAR JAIN
• Assessee Lawyers: PRADEEP TARA
• Keywords: Set aside; Unexplained cash credit; Period of limitation; Principle of natural justice
• Section: 68

Judgement Text

"1 THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH “E” NEWDELHI BEFORESHRISUDHIR KUMAR, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.1128/Del/2025 Assessment Year: 2017-18 Vivek Chopra B-3/62, Janakpuri, Delhi Vs. ITO, Ward – 49 (3) Delhi PAN No.AADPC0096R (Appellant) (Respondent) ORDER PER SUDHIR KUMAR JM: The assessee preferred the appeal, challenging the order dated passed by National Faceless Appeal Centre, Delhi (in short “NFAC”) order dated 16.03.2024 for A.Y. 2017-18. Appellant by Sh. Pradeep Tara, Advocate Ms. Puja Anand, Advocate Respondent by Sh. Dheeraj Kumar Jain, Sr. DR Date of hearing 01.07.2025 Date of pronouncement 01.07.2025 2 2. The assessee has raised following grounds of appeal : 1. That the order passed by the learned CIT(A) NFAC after the order passed by A.O. Ward 49(3) Delhi, is against the law and facts of the case wherein he has finally given a relief of only Rs. 5,00,000/- and confirmed the addition of Rs. 44,95,000/- on account of cash deposited in Banks during the year under consideration. 2. That the Assessee was prevented by sufficient cause in not participating in the proceedings of Appeal before CIT (A) NFAC and therefore, the assessee has gone unheard in this matter and as per principles of natural justice, the assessee deserves a decent hearing to present his case. Grounds for Cash Deposited in Bank to the tune of Rs.49,95,000/- 3. THAT the Ld. AO has grossly erred in invoking Section 68 of the Income Tax Act. The deposits made by the assessee cannot by any stretch imagination be taken as Unexplained Cash Deposit. The deposits were out of sales proceeds/ amount received from sundry debtors resulting into cash in hand. The invoking of section 68 and charging tax u/s 115BBE of the Income Tax Act is wholly wrong and contrary to law. 3 3. The appeal is filed by 271 days delay and the assessee has filed an application with an affidavit for condonation of delay. We, have given a thoughtful consideration to the reasons mentioned in the application for the condonation of the delay. We are of the considered opinion that the assessee was prevented by reasonable and sufficient cause for not filing the appeal within the period of limitation, therefore, in the interest of justice the delay is condoned and appeal is admitted for adjudication. 4. The brief facts of the case are that the assessee has filed belated return of income for A.Y.2017-18 on 01-11-2017. The case was selected for scrutiny under CASS. Notice u/s 143(2) of the Act dated 24-08-2018 was issued. The assessee is a dealer of consumer electronic appliances and runs the proprietorship concern in the name and style of Messers US Electronics. During demonetization period from 09.11.2016 to 30.12.2016 the assessee has deposited the cash of Rs.49,95,000/-in assessee’s bank account. This cash was generated out of cash sales made during the normal course of business as well as realizations from debtors. During the course of proceedings, various 4 details such as audited financials, VAT returns, details of stock, confirmed copy of relevant ledgers, cash book, bank book, invoices and explanation for source of cash, etc. were submitted. The AO disregarded the submissions made and explanations given by the assessee and added Rs.49,95,000/- as unexplained cash credit u/s. 68 rws 115BBE of the Income Tax Act. Aggrieved by the order of the AO, the assessee was filed the appeal before NFAC, but NFAC has partly allowed the appeal observing as under : The appellant has not filed any submissions/ documentary evidence to support his grounds of appeal during the appellate proceedings. However, looking to the facts and circumstances of the case, the opening balance as on 01.04.2016, the sales during demonetization period an amount of Rs.5,00,000/- can be treated as deposited from the known sources of the appellant and therefore, addition of Rs.44,95,000/- is confirmed and the appellant gets a relief of Rs.5,00,000/-. The grounds of appeal are partly allowed. 5. The Ld. Sr. DR has relied upon the orders of the authorities below and submitted that the appeal was rightly decided by the Ld. NFAC. 6. We have heard both the sides and perused the material available on record. The Ld. AR of the assessee submitted that assessee could 5 not file the submissions before the NFAC and now he wants to file the relevant documentary evidence before the NFAC. The NFAC has passed the order without hearing to the assessee. In the interest of justice and fair play we deem it fit to restore the matter to the file of the NFAC for fresh adjudication according to law after giving the opportunity of the being heard to the assessee. Therefore, we set aside the order passed by the Ld. NFAC. 7. In the result the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 01/07/2025. Sd/- Sd/- (MANISH AGARWAL) (SUDHIR KUMAR) ACCOUNTANT MEMBER JUDICIALMEMBER Dated:01 July,2025 “Neha, Sr. PS” Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Delhi "