ACIT Vs Pradeep Patil (ITAT Delhi)
ITAT Delhi Upholds Deletion of ₹9.84 Crore Addition – Cash Deposits During Demonetisation Accepted as Genuine Sales
Delhi ITAT dismissed Revenue’s appeal against CIT(A)’s order deleting addition of ₹9.84 crore made u/s 68 in the case of Pradeep Patil, proprietor of M/s Patil Enterprises, a jeweller dealing in gold, silver, kundan & diamond jewellery.
Assessee filed return declaring income of ₹22.91 lakh. Case was selected for complete scrutiny. AO noted large cash deposits of ₹10.16 crore during demonetisation period (09.11.2016 to 31.12.2016). AO held that cash sales from 01.10.2016 to 08.11.2016 of ₹9.95 crore were not genuine & added ₹9.84 crore u/s 68 as unexplained cash credit in assessment order dated 28.12.2019.
CIT(A) on 09.09.2022 deleted the addition holding that AO accepted books of account, purchases & stock, and taxing the same sales again under u/s 68 amounted to double taxation.
Revenue contended that Assessee failed to justify sharp spike in cash sales compared to earlier & later years & Buyers’ genuineness not established.CIT(A) wrongly admitted additional evidence under Rule 46A. AO had observed concentration of sales just before demonetisation.
Assessee’s Defence was that Books were audited u/s 44AB & no defects in purchase, stock or sales were found. Cash sales represented festival season & launch of new jewellery segment “PATIL’s” in October 2016. Huge rush before demonetisation explained sudden spike in sales. All sales duly recorded, VAT returns filed, & profits taxed as business income. Addition u/s 68 amounted to double taxation of same sales.
