Raideep Bhalla & Sons Vs ITO (ITAT Chandigarh)
Books Clean, Sales Matched — No Suspicion Without Evidence – Demon Cash Addition Not Sustainable
Summary
The assessee deposited ₹43.72 lakh in cash during demonetisation, explaining that it represented regular cash sales made before 08.11.2016. The AO accepted most of the sales but still treated ₹20.86 lakh as unexplained, despite no defects in audited books, stock, purchases, or sales. CIT(A) confirmed the addition.
ITAT held that the addition was based purely on suspicion, especially when the sales pattern & bank deposits matched & demonetisation naturally compelled traders to deposit available cash. Cash sales were only 4.57% of turnover, a reasonable level.
Held: Cash deposits were properly explained; addition deleted.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
The present appeal has been preferred by the assess ee against the order dated 08.04.2025 of the Commissioner of Income Tax (Appeals) NFAC, Delhi [in short ‘the CIT (Appeals)] pertaining to 2 01 7-18 assessment year.
2. The assessee in this appeal is aggrieved by the action of the CIT (Appeals) in confirming the addition of Rs.20,86,585/- made by the Assessing Officer (in short ‘the AO’) on account of cash credits into the bank account of the assessee during demonetization period.
