Yash Ornaments Private Limited Vs ACIT (ITAT Lucknow)
The assessee filed an appeal against the order of the Commissioner of Income Tax (Appeals), Bareilly dated 30.12.2019 for the assessment year 2017-18.
The assessee, engaged in the Sarrafa business, filed its return of income on 19.09.2017 declaring a total income of Rs.56,04,230. The return was processed under Section 143(1) by the Central Processing Centre, Bangalore. Subsequently, the case was selected for scrutiny through CASS on the ground that cash deposits of Rs.84,00,000 had been made in the assessee’s bank accounts during the demonetisation period. The Assessing Officer completed the assessment under Section 143(3) by determining the total income at Rs.1,19,47,230 after making an addition of Rs.63,43,000 under Section 68, treating the cash deposited in the bank account as undisclosed income.
On appeal, the Commissioner of Income Tax (Appeals), after considering the assessee’s submissions and various case laws, deleted an addition of Rs.58,00,000 but confirmed an addition of Rs.5,43,000 out of the total addition of Rs.63,43,000. The assessee challenged the sustained addition before the Tribunal.
The assessee contended that the Commissioner (Appeals) had confirmed the addition of Rs.5,43,000 purely on an ad hoc basis without assigning any reasons. It was submitted that no speaking order had been passed explaining why this amount alone was sustained after granting substantial relief. The assessee also challenged the findings relating to the alleged jump in sales during the demonetisation period, the absence of defects in the books of account, the application of Section 69A in place of Section 68, the applicability of Section 115BBE, and the alleged double addition. The assessee argued that the original addition itself was arbitrary and that the Commissioner (Appeals), having deleted Rs.58,00,000, had no basis for sustaining the balance amount.
