DCIT Vs Radhika Mehra (ITAT Delhi)
ITAT Delhi: Cash Deposits During Demonetisation Explained by Recorded Jewellery Sales – Section 68 Not Attracted; Capital Introduced under PMGKDS Not Taxable Again
The Delhi Bench of the ITAT dismissed the Revenue’s appeal and upheld the deletion of additions made under section 68 read with section 115BBE for AY 2017-18. The Assessing Officer had treated cash deposits of ₹1.45 crore during the demonetisation period as unexplained money, alleging bogus cash sales of jewellery and inadequate verification of purchases. The CIT(A), after admitting additional evidence, conducted independent enquiries under section 133(6) with major creditors, all of whom confirmed the purchases. The Tribunal noted that purchases, stock, sales, VAT returns, and books of account were accepted and not rejected by the AO; therefore, once purchases were found genuine and sales duly recorded, cash deposits representing sales proceeds could not be treated as unexplained under section 68.
On the issue of ₹50 lakh capital introduction, the Tribunal affirmed the CIT(A)’s finding that the amount had been declared under the Pradhan Mantri Garib Kalyan Deposit Scheme, 2016, with applicable taxes and levies already paid. The same cash deposit could not be taxed again as unexplained capital merely because the declaration was made at the fag end of the year. The Tribunal also rejected the Revenue’s objection under Rule 46A, holding that the CIT(A) had followed due process by conducting enquiries and giving the AO adequate opportunity. Accordingly, the Revenue’s appeal was dismissed in entirety.
FULL TEXT OF THE ORDER OF ITAT DELHI
