Vijay Kumar Jain Vs ITO (ITAT Delhi)
The appeal before the Income Tax Appellate Tribunal, Delhi Bench, arose from the assessment order passed under Section 143(3) of the Income-tax Act, 1961 for Assessment Year 2017-18, wherein an addition of ₹1,36,90,000 was made under Section 68 read with Section 115BBE on account of cash deposits during the demonetisation period. The assessee challenged the addition, contending that the cash deposited in the bank represented genuine cash sales already recorded in the books of account and offered to tax.
The assessee, engaged in the business of trading in fabrics, had declared total income of ₹13,29,450. During scrutiny assessment, the Assessing Officer examined cash deposits made between 09.11.2016 and 31.12.2016 and found the explanation regarding their source unsatisfactory. The deposits were treated as unexplained cash credits. The CIT(A) affirmed the addition, primarily observing that substantial cash sales had been recorded during the relevant year, unlike the preceding and succeeding years, and that the sudden increase in cash sales around the demonetisation period created suspicion regarding their genuineness.
Before the Tribunal, the assessee raised an additional legal ground contending that the impugned addition resulted in double taxation because the cash sales had already been reflected in the trading and profit and loss account and the resultant profits had been subjected to tax. The Tribunal admitted the additional ground, observing that it raised a legal issue based on facts already available on record.
