Gopal Lal Gupta Kalani & Co. LLP Vs DCIT (ITAT Jaipur)
The Jaipur ITAT allowed the assessee’s appeal against the order of the CIT(A), Udaipur-02 dated 29.10.2025. The assessee, engaged in purchase and sale of utensils through M/s Gopal Bartan Bhandar, was subjected to survey under Section 133A on 23.11.2017. The return declared total income of Rs.3,86,360, while assessment under Section 143(3) determined total income at Rs.28,93,810 after additions of Rs.9,55,444 for unexplained excess cash and Rs.15,52,000 for alleged unexplained cash loans. The CIT(A) restricted the excess-cash addition to Rs.8,67,573 and confirmed the Rs.15.52 lakh addition.
Regarding the excess cash, Rs.9,58,790 was found during survey. The assessee explained that the excess cash represented cash generated from unrecorded sales corresponding to short stock of Rs.8,64,872, with gross profit of Rs.87,871 at the declared rate of 10.16%, resulting in total unrecorded sales of Rs.9,52,743. The CIT(A) accepted that the short stock represented unrecorded sales but allowed telescoping only to the extent of the gross profit component and sustained Rs.8,67,573 as unexplained. The ITAT held that the entire unrecorded sales were admittedly made in cash and the excess cash found was Rs.9,55,444. It found no evidence of corresponding payment for purchases of the unrecorded sales and no reason for restricting telescoping to the profit element. The Tribunal therefore allowed telescoping of the entire unrecorded sales and deleted the Rs.8,67,573 addition.
