VINAY CHAWLA,DELHI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 63(1), DELHI, DELHI

आदेश / ORDER PER AMITABH SHUKLA, AM This appeal filed by the Assessee is directed against the order of Ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, New Delhi, dated 01.09.2025 arising out of assessment order dated 28.12.2019 passed under section 143(3) for the Assessment Year 2017-18. The word ‘Act’ herein this order would mean Income Tax Act, 1961. 2. The assessee has raised following grounds of appeal:- 1. The Ld. CIT(A) erred in confirming the arbitrary addition of Rs.33,00,000 u/s 68 made by the Ld.AO u/s 143(3). 2. The Ld. CIT(A) during appellate proceedings requested for certain details/documents which were duly submitted but not considered by him while passing appellate order. 3. Heard both the parties. Perused material available on record. 4. Brief facts of the case are that the assessee is a wholesale trader of textiles and proprietor of M/S Harlal International. He has declared total turnover of Rs.1,83,72,457/- in ITR during the relevant year. He is also director of a company M/S Silver Vertones Specialty Textile Private Limited and received salary of Rs. 30,40,000/- during A.Y. 2017-18 from the said company. Appellant made cash turnover of Rs.76,93,367/- out of total turnover of Rs. 1,83,72,457/- during A.Y. 2017-18. He deposited cash of Rs. 33,00,000/-out of available cash in hand in current account with OBC bank during demonetization period. However, the Ld. Assessing Officer added the whole amount of Rs. 33,00,000/- deposited during the demonetization period on the premise that there is no cash in hand/no cash sales before demonetization period in the month of September/October/upto 8th November by the assessee. 5. The ld. Counsel for the assessee submitted that the said presumption of the Ld. AO is without any basis and therefore not tenable at all. It was argued that the Ld. AO has misdirected himself to conclude that the appellant has inflated the cash sales before demonetization. It was submitted that the assessee has not revised any VAT return prior to demonetization period to inflate the turnover nor has the appellant revised its ITR for last A.Y. 2016-17 so as to increase the cash in hand as on 31.03.2016. The main reason for increase in turnover during September 2016 to November 2016 was attributed to festive season such as Diwali, Vijaydashmi etc. during these months. The ld. Counsel submitted that the appellant was having sufficient stock in hand so as to justify the increase in cash sales during these months. The ld. Counsel also submitted that it had provided requisite documents in support of its contentions to lower authorities but which were not considered. 6. The ld. DR placed reliance upon the orders of the lower authorities. 7. We have heard rival submissions in the light of material placed on record. The ld. Counsel for the assessee has reiterating, invited our attention to the assessee’s submissions and details comprising his extracts of books of account, reconciliation of sales and purchases, cash deposits etc. We have noted that the Revenue could hardly dispute that the ld. AO have nowhere specifically rebutted all these supporting documents in the assessment proceedings. The fact however remaining, that the assessee has not fully proved the source of increase of cash sales and consequent cash deposit. Be that as it may, we are of the considered view that the learned AO could not have summarily rejected the assessee’s foregoing explanation, reconciling on its cash deposits to regular business sales, and therefore it is deemed appropriate that lumpsum addition of only Rs.5 lakhs in the given facts would be just and proper with a rider that the same shall not be treated as precedent. Necessary computation shall follow as per law. 8. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 03rd July, 2026.

Sd/- Sd/- [ANUBHAV SHARMA] [AMITABH SHUKLA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 03.07.2026 Shekhar Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi,