ITO Vs Asal Jewellery (ITAT Ahmedabad)
Ahmedabad ITAT: ₹13.68 Crore Demonetisation Cash Deposits Cannot Be Added u/s 69A Merely on Suspicion – Genuine Purchases Support Consequent Cash Sales
The assessee, a jewellery/bullion dealer, deposited ₹13.68 crore in cash during the demonetisation period. The AO questioned the substantial cash sales immediately preceding demonetisation, particularly because individual sale bills were below ₹2 lakh, and added the entire cash deposits under Section 69A.
The CIT(A) deleted the addition, noting that the assessee had produced purchase bills, suppliers’ ITRs, bank statements and other supporting documents. Responses/confirmations to notices under Section 133(6) were also received, and the AO had failed to establish that either the purchases or corresponding cash sales were non-genuine.
The ITAT upheld the deletion. Significantly, the AO had not rejected the books of account. Once the assessee furnished the relevant documents and the Section 133(6) enquiries supported the genuineness of purchases, the assessee had discharged its primary onus.
The Tribunal rejected the Revenue’s objection that sales were deliberately kept below ₹2 lakh to avoid furnishing customer details. Under Rule 114B, PAN of the purchaser was required only where the transaction exceeded ₹2 lakh; therefore, no adverse inference could be drawn merely because the individual cash sale invoices were below that threshold.
