ACIT Vs SSP Polymer Limited (ITAT Delhi)
Rule 46A(4) Power Properly Used: ITAT Delhi (Dehradun Bench) Upholds Deletion of Demonetisation Cash Addition
Delhi ITAT (Dehradun Bench), in ACIT vs. SSP Polymer Ltd. (ITA No.162/DDN/2024, AY 2017-18, order dated 23.12.2025), dismissed the Revenue’s appeal and upheld deletion of ₹2.43 crore addition relating to cash deposits during demonetisation, rejecting the Department’s objection based on Rule 46A.
The assessee-company, engaged in manufacturing and trading of plastic packaging material, had deposited ₹2.53 crore in cash during the demonetisation period. The AO treated ₹2.43 crore as unexplained u/s 69A/68, primarily by comparing cash sales of earlier years and ignoring the commencement of a new VAT-exempt unit at Kundli (Haryana) from 11.08.2016.
Before the CIT(A), the assessee explained that the increase in cash deposits was attributable to:
– substantial growth in overall sales,
– operations of the new Kundli unit,
– cash collections from sundry debtors prior to 08.11.2016, and
– consistent figures reflected in VAT returns and Excise returns.
The CIT(A), exercising suo-motu powers u/r 46A(4), called for and examined VAT and Excise records (already part of the assessment record), analysed sales trends for FYs 2015-16 to 2017-18, and found the explanation reasonable and supported by contemporaneous statutory records. The addition was deleted both under normal provisions and MAT u/s 115JB.
Before the ITAT, the Revenue contended that the CIT(A) violated Rule 46A by admitting additional evidence without AO’s remand. Rejecting this, the Tribunal held that:
– documents were already available before the AO;
– the CIT(A) had merely exercised statutory power u/r 46A(4);
– where evidence is called for by CIT(A) himself, no remand report is mandatory.
Relying on Madras HC in Standard Press (India) (P.) Ltd., the ITAT held that Rule 46A is not attracted in such circumstances. Finding no infirmity in the detailed factual analysis by CIT(A), the Tribunal dismissed the Revenue’s appeal
FULL TEXT OF THE ORDER OF ITAT DELHI
