A P Jewellers Vs DCIT (ITAT Agra)
The ITAT Agra considered the assessee’s appeal against the order dated 11.03.2026 passed by the CIT(A)/NFAC under Section 250 of the Income Tax Act, 1961, for A.Y. 2017-18. The CIT(A) had dismissed the assessee’s appeal and confirmed an addition of Rs.2,40,29,635/- under Section 68 read with Section 115BBE.
The assessee firm was engaged in trading and manufacturing gold and silver ornaments and followed the mercantile system of accounting. It filed its return on 28.10.2017 declaring total income of Rs.2,07,39,850/-. After processing under Section 143(1), the case was selected for complete scrutiny through CASS. Notices under Sections 143(2) and 142(1) were issued concerning cash deposits of Rs.2,40,29,635/- during the demonetisation period, particularly from 09.11.2016 to 30.12.2016.
The assessee explained that the deposits represented cash sales from its jewellery business and furnished supporting records. The Assessing Officer was not satisfied and considered cash sales of Rs.2,40,29,635/- during October and November 2016 to be inflated, artificial and unexplained. The amount was added to the assessee’s total income under Section 68 read with Section 115BBE.
Before the ITAT, the assessee contended that it had produced its books of account, stock register, cash book, ledger, sales and purchase registers, bank statements, VAT returns, audit report and details of SBN and non-SBN deposits. It submitted that the revenue authorities had neither rejected the books nor invoked Section 145(3), identified discrepancies in purchases, stock or sales invoices, nor found excess or shortage of stock. The assessee also pointed out that the relevant cash sales were recorded in its books and that the resulting receipts and profits had already been included in the returned income.
