HARVINDER SINGH BHATIA, LUDHIANA,LUDHIANA vs. JAO NOW THE INCOME TAX OFFICER WARD 5(1), LUDHIANA, LUDHIANA

आदेश / O R D E R RAJESH DAMODARLAL SHARMA (Judicial Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 is directed against the order dated. 17-11-2025 passed by Ld. Addl. / JCIT (A)-2, Chennai in the matter of an assessment as framed by Ld. Assessing Officer u/s 143(3) of the Income Tax Act on 29-12-2019. The sole grievance of the assessee is confirmation of addition of cash

deposit for Rs.45.44 Lacs. Having heard rival submissions, the appeal is disposed-off as under. 2. The brief facts of the case are that the assessee is an Individual carrying on two proprietorship concerns namely M/s Lucky Steels (trading in iron & Steel) and M/s Shree Luxmi Tex Fab (trading in denim / textile cloth). The Assessee filed his return of income for this year on 01-09-2017 declaring total income of Rs.9,48,800/- which was scrutinized to examine the sources of cash deposit during demonetization period. The assessee deposited aggregate cash of Rs.47.44 Lacs in bank accounts of two concerns and accordingly, required to explain the sources of the same. 3. The assessee furnished cash book of the two concerns and stated that the cash was deposited out of available cash-in-hand. The assessee also tabulated month-wise sale and cash summary to substantiate its case. However, Ld. AO alleged that the cash sales were introduced by fabricating the books of the firm and accordingly, added the deposits u/s 68. The same stood confirmed by Ld. CIT(A) against which the assessee is in further appeal before us. 4. Upon careful consideration of enumerated facts, it could be ascertained that the impugned addition stem from adverse inference drawn by Ld. AO from month-wise decline in the ratio of cash sales to total sales without any corresponding defect having been found in the regular books of account. The books have not been rejected u/s 145(3). The cash availability stood independently corroborated by quantitative details, cash book and cash summary. The sales turnover is not in

dispute and the sales are duly substantiated by VAT returns. Therefore, making the impugned addition is nothing but double addition i.e., once by considering the same as sale and again by adding the same u/s 68. The same is not permissible. The books of the assessee are duly audited as required under law. The various decisions as placed on record duly support the case of the assessee. We also find that the assessee has maintained complete details of quantitative stock and the assessee has furnished cash book to Ld. AO in support of source of cash deposits. The sales turnover of the assessee has not been disputed and no defect has been pointed out in the books of the assessee. The nature of assessee’s business is such that it generates regular cash sales which are deposited in the bank account. All the cash receipts and cash deposits form part of assessee’s cash book. On these facts, the sources of impugned cash deposits could not be doubted and therefore, the impugned addition is liable to be deleted. We order so. 5. The appeal stand allowed. Order pronounced on 03rd September, 2026

-Sd- -Sd- (MANOJ KUMAR AGGARWAL) (RAJESH DAMODARLAL SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER AS Dated: 03.09.2026

आदेश की �ितिलिप अ�ेिषत /Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KENDRIYA SADAN, SECTOR – 9A CHANDIGARH