Sanjeev Kumar Jain Vs ITO (ITAT Delhi)
Title 1: Demonetization Cash Addition Deleted: ITAT Accepts Audited Cash Balance for Business Deposits; Higher Tax Rate Inapplicable: ITAT Confirms Sec. 115BBE Cannot Apply to AY 2017-18
Delhi ITAT deleted ₹40.07 lakh added u/s 68 on cash deposits in the Assessee’s proprietary firms, holding that audited books showed sufficient cash balance & AO never doubted sales or purchases.
However, regarding ₹7.5 lakh deposited in the personal HDFC account, Tribunal sustained ₹3.75 lakh for want of evidence. It also held that higher tax u/s 115BBE couldn’t apply to AY 2017-18 per Smile Microfinance Ltd. (Madras HC).
Thus, the appeal was partly allowed, granting major relief to the Assessee.
FULL TEXT OF THE ORDER OF ITAT DELHI
The captioned appeals are filed by the Assessee against the order of Ld. Commissioner of Income Tax (Appeals/ National Faceless Appeal Centre (‘Ld. CIT (A)/NFAC’ for short), New Delhi dated 16/01/2025for the Assessment Year 2017-18.
2. The grounds of appeal are as under:-
“1. On the peculiar facts of the case and in law, the assessment order passed by the learned AO and also the appeal order passed by the learned CIT(A)/NFAC are liable to be set aside.
2. On the peculiar facts of the case and in law, the additions of Rs.4557000/-(Rs.1909000/- + Rs.1898000/- + Rs.750000/-) are liable to be deleted, more particularly because no proper show cause notice had been issued to the appellant assessee prior to making such addition.
3. On the peculiar facts of the case and in law, the additions of Rs.4557000/-Rs.1909000/- Rs.1898000/- + Rs.750000/-) are liable to be deleted, more particularly because the provisions of section 68 had no applicability.
4. On the peculiar facts of the case and in law, the addition of Rs.1909000/-(difference of Rs.2009000/- being the total amount of cash deposited during the demonetization period, out of the closing cash in hand of Rs.2036799/- as on 08.11.2016 appearing in the books of M/s Anmol Rang Rasayan Kendra- a sole proprietary concern of the appellant assessee and Rs.100000/- being the benefit allowed on adhoc/estimated basis) is liable to be deleted
5. On the peculiar facts of the case and in law, the addition of Rs.1898000/-(difference of Rs.1998000/- being the total amount of cash deposited during the demonetization period, out of the closing cash in hand of Rs.2061261/- as on 08.11.2016 appearing in the books of M/s Zensons& Co.- a sole proprietary concern of the appellant assessee and Rs.100000/-being the benefit allowed on ad-hoc/estimated basis) is liable to be deleted.
6. On the peculiar facts of the case and in law, the addition of Rs.750000/-(being the total amount of cash deposited in the HDFC bank account of the appellant assessee which represented the amounts received back by the appellant assessee from various persons) is liable to be deleted.”
2. Brief facts of the case are that, the Assessee filed return of income of Rs. 4,67,950/-. The case of the Assessee was selected for scrutiny under CASS. An assessment order came to be passed u/s 143(3) of the Act by making an addition of Rs. 45,57,000/- u/s 68 of the Act on the ground that Assessee’s own unexplained and unaccounted money has been routed into his business concerns during the demonetization period. Aggrieved by the assessment order dated 26/12/2019, the Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 16/01/2025 dismissed the Appeal of the Assessee. As against the order of the Ld. CIT(A) dated 16/01/2025, the Assessee preferred the present Appeal on the grounds mentioned above.
