ITO Vs Himanshu Goel (ITAT Delhi)
No Double Tax on Cash Sales, Sundry Creditors Also Protected: ITAT Upholds Deletion of Additions in Jewellery Trader’s Case
The Delhi Bench “E” of the ITAT, in ITO v. Himanshu Goel (AY 2017-18), dismissed the Revenue’s appeal and upheld the CIT(A)’s deletion of additions aggregating to ₹1.20 crore, holding that the AO’s approach resulted in double taxation and internal inconsistency.
The AO had made two major additions:
- ₹70.89 lakh as unexplained cash deposits under section 69A, and
- ₹51.58 lakh as unexplained sundry creditors, primarily due to non-response to notices under section 133(6).
On appeal, the CIT(A) deleted both additions. The Tribunal affirmed this view, noting that:
- ₹68.41 lakh of cash deposits were clearly attributable to genuine cash sales of jewellery, duly recorded in the books and already offered to tax. Since the books of account and trading results were accepted, treating the same cash as unexplained would amount to double taxation, squarely covered by precedents such as ACIT v. Haripanna Jewellers.
- ₹2.48 lakh deposited in savings account fell within the CBDT Circular No. 03/2017 threshold for demonetisation deposits up to ₹2.50 lakh, requiring no further explanation.
- Addition of sundry creditors of ₹51.58 lakh was unsustainable because the AO accepted purchases, sales, stock and books, yet doubted creditors merely due to non-response of suppliers. Judicial precedents (including Nikunj Eximp Enterprises) clearly hold that non-reply to 133(6) notices alone cannot justify such additions, especially when liabilities arise from accepted purchases and partly represent opening balances.
The Tribunal held that the CIT(A)’s findings were reasoned, consistent with law, and supported by judicial precedents, and therefore called for no interference. Accordingly, the Revenue’s appeal was dismissed in full, confirming that genuine cash sales cannot be taxed twice and trading creditors cannot be disbelieved without cogent evidence.
FULL TEXT OF THE ORDER OF ITAT DELHI
The appeal filed by the Department of Revenue is against order dated 02.07.2025 of Learned Commissioner of Income Tax (Appeals)/National Faceless Assessment Centre (NFAC), Delhi (hereinafter referred to as “Ld. CIT(A)”) under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) arising out of order dated 21.12.2019 of the Learned Assessing Officer/Income Tax Officer, Ward 60(1) ((hereinafter referred to as “Ld. AO”) assessment year 2017-18 under Sections 143(3) of the Act for AY 2017-18.
