GEETANJALI SOOD,NEW DELHI vs. INCOME TAX OFFICER, NEW DELHI

PER MANISH AGARWAL, AM :

The present appeal has been filed by the assessee against the order dated 08.10.2024 passed by Ld. Commissioner of Income Tax (A), National
Faceless Appeal Centre (“NFAC”), Delhi [“Ld.CIT(A)”] in Appeal No.CIT(A), Delhi-
17/10749/2019-20 passed u/s 250 of the Income Tax Act, 1961 [“the Act”]
arising from the assessment order dated 27.12.2019 passed u/s 143(3) of the Act pertaining to assessment year 2017-18. 2. Ground Nos. 1 to 7 raised by the assessee are with respect to the cash deposited during the period of demonetization of Rs.1,43,61,727/- in the bank account of the assessee maintained with OBC, HDFC and Axis Bank and Specified Bank Note (“SBN”) by holding the same as unexplained.
3. Before us, Ld. AR of the assessee submitted that the assessee is engaged in the business of trading of gold jewellery, jewellery studded precious stones, diamonds etc. under the name and style of M/s. Sood Jewellers. The return of income was filed on 27.10.2017, declaring total income of Rs.11,39,270/-. The AO based on the information available on record that the assessee has made cash deposit in the bank account maintained by her totaling to Rs.1,43,61,727/- asked the assessee to furnish the source of same. Before the AO, it was submitted that the cash was deposited out of realisation of sales made during the period of 01.10.2016 to 08.11.2016 that is the date when the demonetization was announced by the Hon’ble Prime Minister. He submits that the AO has accepted the trading results declared by the assessee however, had made addition of cash deposited which was claimed as realization of sales made in cash. Thus, it is a double addition of income. Ld. AR for the assessee further submits that the AO has made the addition by simply comparing the cash sales made in the year and preceding year by ignoring the fact of the sales were duly recorded in the books of accounts and were accepted. He further submits that the AO as well as CIT(A) has not appreciated these facts and therefore, prayed for the deletion of the additions so made.
4. On the other hand, Ld. CIT DR for the Revenue vehemently supported the orders of the authorities below and submitted that the assessee has claimed that the amount was deposited out of cash sales. However, it is seen that in the month of April to September, there were maximum sales of Rs. 11
lakh in cash in the month of July and other ones the cash sales was very low which is apparent from the chart at page 30 of Ld. CIT(A)’s order. However, in the month of October and November 2016 up to 08.11.2016, the assessee has claimed more than Rs.13,57,863/- which create doubts about the claim of the assessee and therefore, he requested that the lower authority has rightly invoked the provision of section 68 and made the addition of cash deposited in SBN as unexplained money of the assessee. He requested for the confirmation of the same.
5. Heard both the parties and perused the material available on record.
From the above discussion of both the parties, we see no reason to express our concurrence with either of the parties’ stand in entirety. We wish to make it clear first of all that the assessee is engaged in the business of trading gold jewlerry, jewelly studded precious stones, diamonds etc. The Revenue could hardly dispute that all the corresponding evidence forming part of the records has been simply brushed aside by the lower authorities by merely drawing comparison between cash sales of INR 11 Lakhs in the month of July vis-à-vis those issues in financial year 2016-17 before us. That being the case, we are of the considered view that although the assessee has not satisfactorily discharged its onus of filing a complete reconciliation of its cash sales/cash in hands vis-à-vis the business turnover as representing cash deposits in issue, it could not be altogether denied the credit thereof in entirety as such this course of action would not be sustainable in law. We, therefore, deem it appropriate in the larger interest of justice that a lump sum addition only to the extent of INR
5 lakhs in the given facts would be just and proper with a rider that the same shall not be treated as a precedent. The assessee gets the relief of Rs.1,38,61,727/- in other words. Necessary computation shall follow as per law.
6. So far as assessee’s assessment under section 115BBE is concerned, we quote S.M.I.L.E. Microfinance Ltd. Vs. ACIT, W.P. (MD) No.2078 of 2020 &
1742 of 2020, dated 19.11.2024 (Madras) that the impugned statutory provision would come into effect on the transaction done on or after 01.04.2017
only. The assessee is accordingly, directed to be assessed under the normal provision as per law.
7. In the result, the appeal of the assessee is partly allowed.

Order pronounced in the open Court on 04.06.2025. (SATBEER SINGH GODARA)
JUDICIAL MEMBER

*Amit Kumar, Sr.P.S*
Date:-25.06.2025