Shivinder Pal Singh Chahal Vs ACIT (ITAT Delhi)
In the case of Shivinder Pal Singh Chahal vs. ACIT (ITAT Delhi), the Income Tax Appellate Tribunal (ITAT) addressed the addition of ₹26.35 lakh made by the Assessing Officer (AO) under Section 68 of the Income Tax Act, treating it as unexplained cash deposits during the demonetization period. The AO noted that sales during this period were significantly higher than usual and consequently added the amount to the assessee’s income. The CIT(Appeal) upheld this addition. However, upon appeal, the ITAT observed that the Revenue Department had already accepted the sales and purchases recorded in the books, and there was no rejection of the books of accounts. Given these facts, the tribunal ruled that the addition was unsustainable and directed its deletion, providing relief to the assessee.
Additionally, the ITAT addressed an unreconciled purchase difference of ₹7.52 lakh, which arose due to mismatches between the invoice values in the Income Tax Return (ITR) and the import-export data provided by the CBEC. The AO found the explanation provided by the assessee unconvincing and treated the amount as an unexplained expenditure under Section 69C. The CIT(A) upheld this addition, and the ITAT also concurred, stating that the assessee had not provided a credible reconciliation. As a result, the tribunal confirmed the ₹7.52 lakh addition. The appeal was thus partially allowed, with relief granted on the cash deposit issue but not on the purchase discrepancy.
