N.K. CHAINS PRIVATE LIMITED,MEERUT vs. CIRCLE 1(2)(1), MEERUT

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ITA 8603/DEL/2025Status: DisposedITAT Delhi27 May 2026AY 2017-183 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal acknowledged the assessee's business and compliance with VAT provisions but noted the failure to reconcile sales turnover with cash deposits. Consequently, a lumpsum addition of Rs. 6 Lakhs was deemed just and proper, providing significant relief to the assessee.

What were the facts?

The assessee, a private limited company engaged in the jewellery business, had made cash deposits of Rs. 1,35,92,000/-. The Assessing Officer treated these deposits as unexplained under Section 68, and the CIT(A) upheld a part of this addition.

What were the issues?

The primary issue was whether the cash deposits made by the assessee were adequately explained. The tribunal also considered the applicability of Section 115BBE based on the transaction date.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘G’ NEW DELHI

Before: SHRI SATBEER SINGH GODARA & SHRI NAVEEN CHANDRA

For Respondent: Shri Ravi Kant Choudhary, Sr. DR
Hearing: 20.05.2026Pronounced: 20.05.2026

PER SATBEER SINGH GODARA, JM

This assessee’s appeal for assessment year 2017-18, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s order dated 22.10.2025 passed in DIN and order No. ITBA/NFAC/S/250/2025-26/1081923616(1), involving proceedings under section 143(3) of the Income-tax Act, 1961; hereinafter referred to as ‘the Act’.

ITA No.8603/Del/2025 Case called twice. None appears at the assessee’s behest. It is accordingly proceeded ex-parte.

2.

It next transpires with the able assistance coming from the Revenue side that the assessee/appellant is aggrieved against the Assessing Officer’s assessment order dated 26.12.2019 treating his cash deposits of Rs. 1,35,92,000/- as unexplained u/s 68 of the Act as partly upheld to the extent of Rs. 1,25,92,000/- in the lower appellate discussion.

3.

It is in this factual backdrop that the Revenue vehemently argues in support of the impugned addition that the same deserves to be upheld on account of the assessee’s failure in proving source of these cash deposits. There does not appear to be much a dispute that the assessee/ a company has all along having carried out its regular business activity in jewellery sector which stands further supported by the regular books of accounts as well as compliance to VAT provisions as well. The fact however remains that it has failed to plead and prove the necessary reconciliation/ verification of its regular sales turnover viz-a-viz. the impugned cash deposits to the entire satisfaction of both the learned lower authorities. We deem it appropriate in this peculiar backdrop that a lumpsump 2 | P a g e

ITA No.8603/Del/2025 addition of Rs. 6 Lakhs only in the assessee’s hands in such an instance would be just and proper with a rider that the same shall not be treated as a precedent. The assessee gets relief of Rs. 1,19,92,000/- in other words.

5.

We further 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) wherein their lordships have settled the issue that the impugned statutory provision of section 115BBE would come into effect on the transaction done on or after 01.04.2017. The sole assessee shall be assessed under “normal” provisions only.

This assessee’s appeal is partly allowed. 6.

Order pronounced in the open court on 20.05.2026 .

Sd/- Sd/- (NAVEEN CHANDRA) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 27.05.2026 Pooja Mittal/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi

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