Payal Kedia Vs ACIT (ITAT Jaipur)
The assessee filed an appeal against the order of the National Faceless Appeal Centre (NFAC) dated 16.07.2025 passed under Section 250 of the Income-tax Act, 1961. The principal dispute related to the addition under Section 68 in respect of cash deposited in the assessee’s bank account during the demonetisation period. The Assessing Officer (AO) had treated the entire cash deposit of Rs.26,22,500 as unexplained cash credit. The CIT(A) partly granted relief by excluding Rs.2,50,000 attributable to cash withdrawn from the bank immediately before deposit and Rs.2,36,800 surrendered under the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKY), thereby sustaining an addition of Rs.21,35,700. The assessee also challenged the application of Section 115BBE and a lump sum disallowance of Rs.5 lakh out of job work and wages expenses, though the Tribunal identified the principal issue as the addition relating to cash deposits during demonetisation.
The assessee explained that the cash deposits of Rs.21,35,700 represented cash received from sales duly recorded in the books of account. In support of this explanation, the assessee furnished complete books of account, cash book, sales bills, and a list of 22 parties from whom cash had been received. TIN numbers were furnished for the parties wherever available, while it was stated that the remaining parties were small-scale unregistered dealers. The assessee also submitted that all such sales had been disclosed in its VAT returns, which had been accepted.
