Patanjali Renewable Energy Pvt. Ltd. Vs DCIT (ITAT Delhi)
The Delhi ITAT decided two appeals filed by the assessee against the orders of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre arising from assessment orders passed under Section 143(3) for Assessment Years 2017-18 and 2018-19.
For AY 2017-18, the assessee challenged various additions, including an addition of ₹33,55,000 under Section 68 read with Section 115BBE relating to cash deposits made during the demonetisation period, an addition of ₹72,47,927 towards an alleged unexplained sundry creditor, disallowance of VAT-related expenses, and disallowance of expenses relating to cessation of input VAT credit.
Regarding the addition of ₹33,55,000 under Section 68, the assessee contended that the cash deposited during the demonetisation period originated from sales duly recorded in its books of account. The Revenue relied upon the findings of the lower authorities. The Tribunal observed that the assessee had attempted to explain the entire cash deposit as arising from recorded sales and had prima facie discharged its burden. However, it also noted that the assessee failed to satisfactorily explain the disproportionate increase in cash sales immediately before demonetisation. At the same time, the Tribunal found that the Revenue’s complete rejection of the assessee’s explanation was not fully justified because the cash deposits were supported by the stock register and purchase records. Considering the factual circumstances, the Tribunal held that some element of unexplained cash sales could not be ruled out. In the interest of justice, it restricted the addition to a lump sum of ₹3.50 lakh, specifically observing that the decision should not be treated as a precedent. Accordingly, this ground was partly allowed.
