NEW STANDARD MOTORS,CHANDIGARH vs. INCOME TAX OFFICER, WARD-5(5), CHANDIGARH , CHANDIGARH

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ITA 1682/CHANDI/2025Status: DisposedITAT Chandigarh11 May 20263 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee's audited books of accounts and cash sales were sufficient to explain the deposits. The addition was based on mere presumptions without concrete evidence.

What were the facts?

The assessee, engaged in trading vehicle spare parts, had cash deposits of Rs. 20.08 Lacs during the demonetization period. The Assessing Officer added this amount as unexplained money, citing insufficient explanation and a surge in closing cash in hand.

What were the issues?

Whether cash deposits made during demonetization are unexplained money when supported by audited books and cash sales, or if they can be sustained on presumption.

Which sections of the Income-tax Act were involved?

Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, CHANDIGARH

Before: HON’BLE SHRI LALIET KUMAR, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH HYBRID HEARING BEFORE HON’BLE SHRI LALIET KUMAR, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं. / ITA No.1682/CHANDI/2025 (िनधा�रण वष� / Assessment Year: 2017-18) M/s New Standard Motors ITO Ward 5(5) C/o Tejmohan Singh (Advocate) Chandigarh बनाम/ Vs. #527, Sector 10-D, Chandigarh – 160011 �ायीलेखासं./जीआइआरसं./PAN/GIR No. AACFN-4822-B (अपीलाथ�/Appellant) (��थ� / Respondent) : अपीलाथ�कीओरसे/ Appellant by : Sh. Tej Mohan (Advocate) – Ld. AR ��थ�कीओरसे/Respondent by : Dr. Ranjit Kaur (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 07-05-2026 घोषणाकीतारीख /Date of Pronouncement 11-05-2026 : आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 26-11-2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 147 r.w.s. 144B of the Act on 23-03-2022. The sole grievance of the assessee is confirmation of addition of cash deposits for Rs.20.08 Lacs. Having heard rival submissions, the appeal is disposed-off as under.

2.

The assessee being resident firm is stated to be engaged in trading of vehicle spare parts. To verify the source of cash deposits during demonetization period, the case of the assessee was reopened and the assessee was required to explain the sources of cash deposits. The assessee filed part details such as cash books and bank statement etc. Not satisfied with these documents, Ld. AO added the deposits of Rs.20.08 Lacs as unexplained money u/s 69A and framed the assessment. 3. The assessee’ submissions during first appeal was subjected to remand proceeding wherein the assessee stated that the deposits were sourced out of cash sales during the year. The assessee furnished audited books of accounts, month wise details of cash sales and cash in hand not only for this year but also for preceding two years. The Ld. AO compared the said data and observed that cash sales during demonetization was Rs.4.67 Lacs as against deposits of Rs.20.08 Lacs. The Ld. AO also alleged that closing cash in hand was shown in excess. There was sudden surge in closing cash in hand during this year. Therefore, the assessee manipulated its books of accounts. Considering the same, Ld. CIT(A) upheld the assessment against which the assessee is in further appeal before us. 4. From the facts, it clearly emerges that the assessee is engaged in trading activities which generate cash sales for the assessee. The assessee’s books of accounts are duly audited and the assessee has furnished cash books for this year. The month wise cash summary is also placed on record. The assessee is having sufficient cash balance

in the cash book to make the impugned deposits. The sales turnover is not in dispute and the sale turnover has duly been reflected in the VAT returns as filed by the assessee. The allegation of Ld. AO is bereft of any concrete evidence or finding and the addition has been made on mere presumptions. This being so, the impugned addition could not be sustained. We order so. No other ground has been urged in the appeal. 5. The appeal stand allowed. Order pronounced on 11th May, 2026.

-Sd- -Sd- (LALIET KUMAR) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AS Dated: 11-05-2026 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

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ITAT CHANDIGARH

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