DCIT Vs Gardenia Shelters Private Limited (ITAT Delhi)
The ITAT Delhi dismissed the Revenue’s appeal against the CIT(A)’s order deleting an addition of Rs.2,99,98,000 under Section 69A of the Income Tax Act, 1961. The assessee’s case was reopened following a search of employee lockers on 31.01.2022, where cash was found. The employees admitted that the cash belonged to the assessee company and represented proceeds from sales of leftover construction material.
The Assessing Officer treated the seized cash as unexplained money under Section 69A and invoked Section 115BBE. The CIT(A) deleted the addition, finding that the assessee had produced invoices, ledger accounts, cash-book entries, buyer confirmations, audited financial statements and GST records supporting the source of the cash.
Before the Tribunal, the Revenue argued that the assessee had failed to provide sufficient independent evidence such as weighment slips, transport documents, delivery records and proof of physical movement of the goods. The assessee maintained that the leftover material had been sold between July and October 2021, the transactions were recorded in its books, GST was charged and deposited, and the buyers had confirmed the transactions in response to notices under Section 133(6).
The Tribunal observed that both employees had consistently stated that the immediate source of the cash was sale of leftover construction material. The sales were recorded in the regular books and reported in GST returns. The Revenue had accepted the sales and corresponding profits without raising doubts. The Tribunal further noted that the CIT(A)’s findings were not controverted by the Revenue through contrary material.
