PAWANS SPECIALITIES PVT LTD,JAIPUR vs. DCIT, CIRCLE - 6, JAIPUR

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ITA 1496/JPR/2025Status: DisposedITAT Jaipur08 June 2026AY 2017-186 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred in not admitting additional evidence (cash book) submitted by the assessee. The matter was restored to the AO for de novo assessment to allow the assessee to produce and verify the evidence.

What were the facts?

The assessee deposited cash into their bank account during the demonetization period, claiming it was from cash sales. The Assessing Officer (AO) made additions for unexplained cash deposits, which the CIT(A) confirmed.

What were the issues?

Whether the CIT(A) was justified in rejecting additional evidence and confirming additions without proper verification. The main issue revolves around the genuineness of cash deposits and the assessee's right to present evidence.

Which sections of the Income-tax Act were involved?

Section 68,Section 145(3),Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JAIPUR BENCHES, “B” BENCH, JAIPUR

Before: SHRI SANJAY GARG & SHRI RATNESH NANDAN SAHAY

Hearing: 25.03.2026Pronounced: 08.06.2026

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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, “B” BENCH, JAIPUR BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & SHRI RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER

ITA No. 1496/JPR/2025 (Assessment Year:2017-18)

Pawan’s Specialities Pvt Vs. DCIT, Ltd. Cirle-06 4th 13, Jawahar Nagar, Jaipur Jaipur �थायीलेखासं./जीआइआरसं./PAN/GIR No:AACCP2937L Appellant .. Respondent

Appellant by : Sh. Tarun Mittal, CA Respondent by : Sh. Gaurav Awasthi, JCIT

Date of Hearing 25.03.2026 Date of Pronouncement 08.06.2026 O R D E R Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order of the National Faceless Appeal Centre/Ld. Commissioner of Income Tax (Appeals) (hereinafter referred to as “the Ld. CIT(A)”)

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dated 06.08.2025 u/s 250 of the Income Tax Act,1961 (hereinafter referred to as “the Act”).

2.

The assessee, in his appeal, has taken following grounds of appeal:-

“1. On the facts and in the circumstances of the case and in law, ld. CIT(A) has erred in not admitting the additional evidences adduced along with prayer u/r 46A for admission of it, defeating the principle of natural justice. Appellant prays that the comments of Id. CIT(A) on non-admission of additional evidences may kindly be ignored, being against the principle of natural justice and law. 2. On facts and in the circumstances Ld. CIT(A) has grossly erred in confirming the actions of ld. AO in invoking provisions of sec 145(3) of the Act, and rejecting the books of assessee by pointing out unreasonable defects, made with a pre-set mind and not accepting the explanation adduced and facts on records. Appellant prays that the action of ld. AO in invoking sec 145(3) is bad in law and the audited results declared by the assessee deserve to be accepted. 2.1 That the ld. CIT(A) has further erred in ignoring the fact that assessee has maintained complete records which were duly audited and no defect what so ever was pointed out by auditor. Thus the books of the assessee deserves to be accepted. 2.2 That the Ld. CIT(A) has further erred in ignoring the fact that the sales made was out of the stock carried forward from previous year and thus the availability of goods is proved beyond doubt and therefore the sales made being duly backed by stock deserves to be accepted. 3. On facts and in the circumstances of the case Id. CTT(A) has grossly erred in upholding the addition of Rs. 93,67,500/-made by Id. AO by treating the same to be Unexplained cash deposits u/s 68 of the Act, arbitrarily and holding the cash deposited into the bank accounts of the assessee as being from undisclosed sources, thus the same deserves to be deleted. 3.1 That the ld. CIT(A) has further erred in wrongly upholding the observations of Id. AO that as per the details received from Bank of Maharashtra in response to notice issued u/s 133(6) to it, the cash deposited during the period 09.11.2016 to 31.12.2016 was Rs. 86,99,500/- as against the amount of Rs. 86,98,000/- actually deposited and as appearing in the bank statement also. Appellant prays that addition so made in a very casual manner by appreciation of incorrect facts, deserves to be deleted.

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3.2 That the ld. AO has made addition by doubting the opening cash balance available as on 09.11.2016, without considering the facts and records and the general practice followed by the assessee, to keep ample cash balances, which was also evident from the closing balance in Other Denomination Notes (ODN) available with the assessee as on 30.12.2016 which was in parity with the opening cash balance on 09.11.2016. Thus the addition so made, based on incorrect observation, deserves to be deleted. 3.3 That the ld. CIT(A) has further erred in rejecting source of cash deposits into bank as being from the cash sales declared by the assessee, arbitrarily and without considering the fact that the said sales were duly disclosed in the VAT return filed by the assessee, which has been accepted as such. Thus addition so made by doubting the sales declared by assessee deserve to be deleted. 4. That the ld. CIT(A) has grossly erred in sustaining the addition u/s 68 r.w.s. 115BBE by treating the cash deposited during the de-monetization period as being undisclosed income of the assessee, whereas the same was out of accumulated cash balance duly reflected in the cash book, which was on account of cash sales made in various preceding months and also in November and the same was required to be deposited in bank on account of directives of the government related to demonetization scheme. Appellant prays such addition is based purely on surmises, without considering the valid explanation filed by the assessee and therefore deserves to be deleted. 5. That, without prejudice to above, ld. CIT (A) has grossly erred in making addition of cash deposited in the bank account u/s 68 of Income Tax Act. Such addition, if at all to be made, could not have been made u/s 68 of Income Tax Act. 6. That the appellant craves the right to add, delete, amend or abandon any of the grounds of appeal either before or at the time of hearing of appeal For Pawan's Specialities Pvt. Ltd.” 3. In this appeal, the Assessing Officer (in short, “the AO”) has made the impugned additions in respect of amount deposited by the assessee in the bank account during the demonetization period. The assessee claimed that the said amount was deposited out of his cash sales. However, the Assessing Officer held that the assessee could not prove that the said amount deposited in the bank account was out of the cash

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sales of the assessee. The ld. AO, for want of sufficient evidence on the file in this respect, made the impugned addition.

4.

Before the Ld. CIT(A), the assessee filed additional evidences and furnished the cash book. It was further explained before the Ld. CIT(A) that the cash book was very bulky and that the assessee, vide letter dated 10.12.2019, had requested to the Assessing Officer that the cash book being bulky has not been attached, and that the assessee will furnish the same for verification of the Assessing Officer, as and when required by him. That the Assessing Officer, however, noted that the assessee had not furnished the requisite evidence. It was, therefore, requested to the ld. CIT(A) to accept the additional evidences in the shape of cash book etc. and, thereafter, the matter may be decided on merits after considering the additional evidence furnished by the assessee. The ld. CIT(A) called for the remand report in this respect from the AO. The AO, instead of examining the cash book and giving any finding as to whether the claim of the assessee that the cash deposits during the demonetization period were out of business receipts or not, mentioned in his remand report that since the assessee had not furnished the said cash book during the assessment proceedings and hence, there was no justifiable reason for acceptance of the said evidence during the appellate proceedings. He, therefore, reported in the remand report that the additional evidence should not be admitted. The ld. CIT(A) accordingly, rejected the application of the assessee for

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admission of the additional evidence and confirmed the addition so made by the AO.

5.

We have heard the rival contentions of the Ld. Representatives of the parties and gone through the record. The Ld. CIT(A), in this case, has rejected the application of the assessee for admission of the additional evidence, merely, on the report of the AO without even considering as to whether the said evidence furnished by the assessee was necessary for just and proper decision of the case. It has been held time and again by various courts of law that the Income Tax Authorities should charge legitimate taxes from the citizens. The assessee had duly furnished the evidence before ld. CIT(A), which was very much necessary for the just and proper decision of the case. The assessee had also duly explained before the CIT(A) that the Cash book being very bulky was not attached with the submissions and the AO was duly requested in writing, that the cash book will be produced for verification as and when so required by the AO. Therefore, the Ld. CIT(A), under the circumstances, ought to have admitted the additional evidence furnished by the assessee. However, ld. CIT(A), in this case, has failed to properly and correctly exercise the jurisdiction vested in him under Rule 46A of the Income Tax Rules.

6.

Considering that the evidence sought to be relied upon by the assessee are necessary for the just and proper decision relating to the correct assessment income of the assessee, we allow the assessee to furnish the

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same on the record. The impugned order of ld. CIT(A) is set aside, the matter is restored to the file of AO for de novo assessment, with a direction to allow the assessee to produce on the file the necessary evidences and thereafter, examine and verify the same and give a detailed finding upon the submissions of the assessee.

7.

With the above observations, the appeal of the assessee is treated as allowed for statistical purposes.

Order is pronounced under provision of Rule 34 of ITAT Rules, 1963 on 08.06.2026

Sd/- Sd/- (Ratnesh Nandan Sahay) (Sanjay Garg) Accountant Member Judicial Member Dated 08.06.2026 Gaensh Kumar, Sr. PS True Copy Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT By Order, Asst. Registrar ITAT, Jaipur

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