INCOME TAX OFFICER WARD 45 (1), DELHI vs. S R TIMBERS, DELHI

The Department has raised the following grounds of appeal: 1. On the facts and circumstances of the case the Learned CIT(A) has erred deleting the addition of Rs. 1,01,96,500/- made by the AO under Section 68 of the Act, by ignoring the fact surge in cash deposits of Rs. 1,34,32,000/- during the demonetization period was abnormal and inconsistent with the assessee's past transaction patterns, thereby casting a duty upon the assessee to conclusively prove the nature and source of such deposits, which it failed to do during the assessment stage. 2. On the facts and circumstances of the case, the Learned CIT(A) erred in accepting the assessee's explanation that the cash deposits were from past business sales, without considering that the AO had, through a comparative analysis of cash deposits in preceding and succeeding years, established a reasonable and logical pattern, and the deviation during the demonetization period was substantial and unexplained. 3. On the facts and circumstances of the case, the Learned CIT(A) incorrectly applied the legal principle laid down in Lalchand Bhagat Ambica Ram v. CIT [1959] 37 ITR 288 (SC), as the Assessing Officer's addition was not based on mere 'suspicion' but on a logical inference drawn from verifiable data and the assessee's own bank statements, which constituted 'proper material' for making the addition. 3. At the outset, the ld. Counsel for the assessee submitted that the impugned appeal of the Revenue is hit by CBDT instruction bearing Circular No.09/2024 dated 17.09.2024 mandating non-prosecution of matters before ITAT where the tax effect is less than Rs.60 lakhs. It was submitted that if the invocation of section 115BBE of the Act is removed in compliance to decision of Hon’ble Madras High Court in Smile Microfinance case, then the tax on overall addition of Rs.1,01,96,500/- would be less than the prescribed limit of Rs.60 lakhs. Reliance was placed upon the decision of a co-ordinate Bench of this Tribunal dated 24.02.2025 in the case of Hajurilal and Sons Jewellers Pvt. Ltd. in ITA No.3497/Del/2023.

Heard rival parties. Perused material available on record.

We have noted that in the case of Hajurilal and Sons Jewellers Pvt. Ltd. in ITA No.3497/Del/2023, this Tribunal in its order dated 24.02.2025 held as under:-

We have noted that facts of the present case are identical to the judicial precedent discussed hereinabove and no distinguishment of facts was pointed out by the ld. Counsel for the Revenue. All the other pleadings of the Revenue on merit have become academic. Accordingly, in respectful compliance to the above decision and for the purposes of consistency, we dismiss the appeal of the Revenue. 7. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open Court on 05th June, 2026.