What did the Tribunal hold?

The CIT(A) held that the cash deposits were from regular business sales and not unexplained income. The Tribunal found no infirmity in the CIT(A)'s order and upheld it.

The Assessing Officer (AO) noticed significant cash sales by the assessee immediately before demonetization and added it as unexplained income. The assessee, however, demonstrated consistent cash sales throughout the year and in previous/subsequent years.

What were the issues?

Whether cash sales made by the assessee were genuine and not unexplained income, considering the timing around demonetization.

ITO vs Vishal Ornaments Private Limited… | s.250 | ITAT Ahmedabad 2026

Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD

Before: SHRI SANJAY GARG & SHRI NARENDRA PRASAD SINHA

For Appellant: Shri Arvind Kumar Namdeo, Sr. D.R, Shri S. N. Divatia & Shri Samir Vora

For Respondent: Shri S. N. Divatia & Shri Samir Vora

Hearing: 30/07/2026Pronounced: 06/08/2026

Per Sanjay Garg, Judicial Member:

The present appeal has been filed by the Revenue against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (hereinafter referred to as “NFAC”), Delhi (hereinafter referred to as “CIT(A)”), dated 10.11.2025 passed

ITA No.147/Ahd/2026 [ITO vs. Vishal Ornaments Private Limited] A.Y. 2017-18 - 2 –

under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2017-18.

The brief facts of the case are that the Assessing Officer (in short ‘the AO’) noticed that the assessee had shown considerable sale of Rs.1,82,32,000/- immediately prior to starting of the demonetization period w.e.f. 08.11.2016. He held that the assessee had deposited his unaccounted income showing the same as cash sales and made the impugned addition holding that the same was the income of the assessee from unexplained sources.

However, before the Ld. CIT(A), the assessee demonstrated that the assessee had been making regular cash sales not only in the year under consideration, but also, in the earlier years. It was also demonstrated before the Ld. CIT(A) that even, in the relevant financial year i.e. F.Y. 2016-17, the assessee has made considerable cash sales during the entire year and every month and that were not restricted only to demonetization period. That even the sales made by the assessee during the earlier months was higher than that was disclosed immediately prior to the demonetization period. Even, the assessee had made considerable cash sales after the demonetization period. The Ld. CIT(A), considering and appreciating the facts on the file, held that it is not a case of any unexplained cash deposit by the assessee, rather, the cash deposits in the bank account, out of cash sales, was

ITA No.147/Ahd/2026 [ITO vs. Vishal Ornaments Private Limited] A.Y. 2017-18 - 3 –

regular feature of the business of the assessee, which has been followed consistently not only in earlier years, but also, in subsequent years. We do not find any infirmity in the order of the Ld. CIT(A) and the same is upheld.

In the result, appeal of the Revenue stands dismissed.

This Order is pronounced on 06/08/2026

Sd/- Sd/- (NARENDRA PRASAD SINHA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 06/08/2026 S. K. SINHA True Copy आदेश क� �ितिल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��यथ� / The Respondent. 2. 3. संबंिधत आयकर आयु� / Concerned CIT आयकर आयु�(अपील) / The CIT(A)- 4. 5. �वभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad

ITO, WARD-4(1)(1), AHMEDABAD, AHMEDABAD vs. VISHAL ORNAMENTS PRIVATE LIMITED, AHMEDABAD

What did the Tribunal hold?

What were the facts?

What were the issues?

Which sections of the Income-tax Act were involved?

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