DCIT Vs DAR Paradise Pvt. Ltd. (ITAT Chennai)
ITAT Upholds Deletion of Demonetisation Cash Deposit Addition Under Section 68
The Income Tax Appellate Tribunal (ITAT), Chennai, first condoned a delay of 136 days in filing the Revenue’s appeal after accepting the Assessing Officer’s explanation that the delay resulted from a technical glitch in the ITBA portal and other administrative reasons, holding that sufficient cause had been shown in the interest of substantial justice.
The assessee, engaged in the business of trading in gold jewellery and bullion, filed its return for Assessment Year 2017-18. During scrutiny, the Assessing Officer examined cash deposits of ₹90,80,86,500 made during the demonetisation period. The assessee explained that the deposits originated from the opening cash balance reflected in its cash book, which comprised earlier bank withdrawals, direct cash sales, and trade advances received from customers under a gold scheme that were subsequently converted into sales. The Assessing Officer conducted enquiries under Sections 131 and 133(6) of the Income-tax Act, 1961. Several notices and summons were returned unserved, while some persons denied knowledge of the alleged gold scheme. On this basis, the Assessing Officer concluded that the claimed trade advances were not genuine and treated the cash deposits as unexplained cash credits under Section 68, taxing them under Section 115BBE.
