Bimal Kunjbihari Gorai Vs ITO (ITAT Ahmedabad)
Demonetisation cash sales disbelieved: Jewellery trader’s books rejected, 68 addition & GP estimation upheld
ITAT Ahmedabad dismissed assessee’s appeal & upheld major additions arising from cash deposits during demonetisation. Tribunal confirmed rejection of books u/s 145(3) noting absence of quantitative stock register, unverifiable stock valuation, abnormal spurt in cash sales to numerous customers just below ₹2 lakh without identity details, & mismatch in GP. It upheld addition of ₹59.90 lakh u/s 68 treating cash deposits as unexplained, holding that alleged jewellery sales were not proved & explanation became wholly implausible in light of FIR against main supplier Hari Darshan Jewellers for large-scale banking fraud & fabricated stock statements. Tribunal also sustained GP estimation at 26.14% (same as preceding year) after rejection of books, holding estimation reasonable. Though CIT(A) had rightly deleted addition on opening stock on technical ground that section 68 does not apply to opening stock, Tribunal held that core factual defects remained unrebutted. Relying on Kachwala Gems, Durga Prasad More & settled law that tax authorities can look beyond façade of documents, ITAT concluded that assessee failed to discharge onus of proving genuineness of stock, sales & cash deposits; consequently, appeal was dismissed in entirety.
