DCIT Vs Saluja Overseas Pvt. Ltd. (ITAT Delhi)
Books Cannot Be Rejected for Mere Absence of Stock Register; Loans Repaid in Same Year and Demonetisation Cash Sales Accepted: ITAT Delhi Dismisses Revenue’s Appeal
The Delhi Bench of the ITAT dismissed the Revenue’s appeal for AY 2017-18 and upheld the order of the CIT(A) deleting three major additions made in the assessment of Saluja Overseas Pvt. Ltd.
First, the Tribunal affirmed deletion of the ₹79.14 lakh addition made by rejecting books under section 145(3) and estimating profits. It held that non-maintenance of item-wise stock register alone is not a valid ground for rejection of books, particularly where no other defects were found, books were audited, and quantitative details could be ascertained. Reliance was placed on S.N. Namasivayam Chettiar (SC) and Paramount Impex (ITAT Chandigarh), and the CIT(A)’s finding was upheld.
Secondly, the ITAT upheld deletion of ₹2.52 crore added under section 68 towards unsecured loans. The Tribunal noted that the loans were received and repaid in the very same year, through banking channels, with identity and genuineness supported by bank statements, GST details and ledger accounts. Since no amount remained outstanding and the assessee was not the beneficiary of its own money, section 68 could not be invoked. Reliance on Ambe Tradecorp (Gujarat HC) and Ganesh Ganpat (ITAT Surat) was found to be correct.
Thirdly, the Tribunal sustained deletion of ₹18.53 crore added on account of cash deposits during the demonetisation period. It was held that once sales and purchases were accepted, VAT returns were on record, sufficient stock was available, and cash deposits during demonetisation were lower than in earlier quarters, mere suspicion could not justify addition under section 68. The ITAT relied on Kalanidhi Jewellers LLP, Delhi Spot Bullion Trading Co., and Hirapanna Jewellers, holding that proceeds of accepted cash sales cannot be taxed again.
Finding no infirmity in the detailed and reasoned order of the CIT(A), the ITAT dismissed the Revenue’s appeal in full.
FULL TEXT OF THE ORDER OF ITAT DELHI
