SHASHANK BULLION PVT. LTD.,MOTI KATRA, AGRA vs. DCIT, CENTRAL CIRCLE, AGRA, CENTRAL CIRCLE, AGRA

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH “DB”, AGRA BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER and SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER ITANo.563/AGR/2025 (Assessment Year : 2017-18) Shashank Bullion Pvt. Ltd., vs. DCIT, Central Circle, 9/47, Moti Katra, Agra. Agra – 282 003 (Uttar Pradesh). (PAN: AAQCS9312J) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Deependra Mohan, CA REVENUE BY : Shri Arun Kumar Yadav, CIT DR Date of Hearing : 21.04.2026 Date of Order : 22.06.2026 O R D E R PER S. RIFAUR RAHMAN, AM : 1. This appeal is filed by the assessee against the order of the Ld. Commissioner of Income-tax (Appeals), Kanpur-4 [hereinafter referred to as ‘ld. CIT(A)] dated 31.10.2025 for the Assessment Year 2017-18. 2. Brief facts of the case are, assessee filed its return of income declaring an income of Rs. 9,62,490/- for A.Y. 2017-18, u/s 139(1) of the Income Tax Act, 1961 (In short ‘Act’). A search and seizure action u/s 132(1) of the Act,

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was carried out on 19.07.2018. The Assessing Officer has completed the assessment u/s 143(3) of the Act, on 30.09.2021 assessing the income at Rs.14,83,29,800/- after making the additions of Rs.1,86,29,800/- for estimated Gross Profit from business, and an addition of Rs. 12,97,00,000/-, for the cash deposited during demonetization period. The assessee is in business of silver, gold bullion trading for which audited accounts have been furnished before the assessing officer. During the assessment proceedings, the AO issued a show cause notice dated 26-09-2021 wherein the AO initially has proposed to disallow 30% of the purchases as being non- genuine purchases against which the assessee has submitted a reply, which also finds place in the assessment order at para 3 / page 24. 3. The AO further show caused on order sheet entry dated 27-9-2021, as to why the books of accounts be not rejected, and Gross profit be not estimated. Thereafter, the books of accounts were rejected, and the AO has estimated the gross profit by taking the highest GP rate of AY 2016-17 at 1.11% to the turnover of the year under consideration i.e. 2017-18, and has estimated the GP at Rs.1,86,29,800/-. The AO has also held that the cash deposited during demonetization period in bank account of the assessee on account of their sale proceeds, as unexplained and has made an addition u/s 68 of the Act for Rs. 12,97,00,000/-.

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books of account u/s 145, without pointing out any defect in the said audited books, and even when the same have been accepted in other years. 4. That the Ld. CIT(A)-4, Kanpur has erred in law and on facts to uphold the impugned addition of cash deposited of Rs. 12,97,00,000/- made by the Ld. AO as unexplained cash credit, even when the same was from regular sales credited in the profit and loss account. 5. That the Ld. CIT(A)-4, Kanpur has erred in law and on facts to uphold the impugned order passed by the Ld. AO after making the addition as unexplained cash credit, even when the appellant has explained the receipts with cogent evidences. 6. That the Ld. CIT(A)-4, Kanpur has erred in law and on facts to uphold the impugned gross profit addition of Rs. 1,86,29,800/- made by the Ld. AO without any adverse inference drawn in the audited books or defect being pointed out. 7. That the Ld. CIT(A)-4, Kanpur has erred in law and on facts to uphold the impugned order passed by the Ld. AO which was passed after not allowing expenditures debited in the audited profit and loss account of the assessee while estimating the Gross Profit. 8. That the Ld. Authorities has erred in law and on facts in completing the proceedings in hasty manner without complying with the requirement of law and without taking proper approval. 9. That the Ld. Authorities has erred in law and on facts in charging interest of Rs. 5,64,40,206/- under section 234B and Rs.5,172/- u/s 234C of the I.T Act 1961 without mentioning the same in the assessment order.” 6. At the time of hearing, ld. AR of the assessee submitted that the assessee is in the business of sale, purchase of silver bullion during the year under consideration which has also done in the past years as well as in the

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subsequent years. In the past assessments, also, the books of accounts of the assessee have been duly accepted, even in the search assessment proceedings by the same AO accepted the books of accounts. The Ld. AR brought to our notice the initial show cause notice dated 26-09-2021 which was issued by the AO, which is as under : “Sub: Show cause notice u/s 142(1) of the IT Act, 1961 in the case of M/s Shashank Bullion Pvt Ltd, A.Y. 2017-18 -reg. This Show cause is in continuation to the earlier show cause issued on 08.04.2021. In the Show cause issued on 08.04.2021, it was show caused that the IDS declarants received payments through RTGS against the sale of silver bullion on various dates from 16.11.2016 onwards. The deal was finally settled by the IDS declarant after delivery of silver bullion of amount equivalent to RTGS received after deduction of commission of 30%. Now since IDS Declarants delivered Silver Bullion to your concern after deducting 30% from the quantity of silver bullion delivered to you as commission, that means you received only 70% of the Silver Bullion only. In view of this you are hereby show caused as to why not your Purchases be disallowed by 30% for the A.Y. 2017-18. You are hereby required to make compliance on or before 27.09.2021. Please note that this is the last and final opportunity. In case of non-compliance, assessment will be completed u/s 143(3) r. w.s. 144 of the IT Act, 1961 on 27.09.2021.”

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the assessee and had initially deducted 30% of the bullion as their

commission, hence he had proposed to disallow 30% of the purchases of the

assessee. Thereafter, the Ld. AR argued that at the end of the assessment proceedings on 27th September 2021, the AO show caused vide order sheet

entry as to why the books of accounts should not be rejected without

pinpointing any specific defects in the said Books of Accounts and simply

stating that since cash was deposited during demonetisation period, the same

books needs rejection. The assessee while submitting his submission dated 29thSept., 2021 which is at paper book pages 47-52 had stated as under : 1. Your honour has queried on 27thSept., 2021 that the sales shown during demonetization period be reduced from the turnover of the assessee for the year, and the books of accounts be rejected under section 145(3) and gross profit rate be estimated for the year under consideration, for which your honour has show caused us. In this regard it is humbly submitted that the assessee has furnished the audited financial statements for the year before your honour in relation to the said assessment proceedings, wherein the audited profit and loss account has also been enclosed, alongwith the Tax Audit Report and Auditors Report on the financial Statements. We have already enclosed the copy of purchase and sale account of silver bullion for your honour’s kind consideration which is part of the audited financial statement and books of accounts. These said books of accounts have already been audited by an Independent Chartered Accountant wherein no adverse inference has been drawn and the said books of accounts have always been accepted to be true and fair by the income tax department in our past proceedings under section 143(3) and the authenticity of these books of accounts has always been accepted. 2. The trading results of the assessee are as under : AY Sales Cash sales Credit sales GP GP % NP NP % 2015-16 1,39,17,042 64,13,074 75,03,961 1,30,901 0.94 53,514 0.38 2016-17 1,16,05,430 36,84,541 79,20,889 1,29,299 1.11 41,828 0.36 2017-18 1,80,80,60,352 19,17,24,547 1,61,63,35,805 18,19,008 0.10 6,84,097 0.04

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2018-19 1,12,10,92,069 34,07,636 1,11,76,84,433 19,27,105 0.17 13,33,294 0.12 2019-20 2,35,10,032 - 2,35,10,032 65,759 0.28 14,530 0.06 In the assessment year 2015-16 and 2016-17 only a small quantity of silver bullion was sold that to dealers, hence the trading results of the said year are not comparable to the subsequent years, as in subsequent years i.e. 2017-18 to 2019-20, the assessee did trading in silver and gold bullion to a great extent, even the turnovers are not comparable of AY 2015-16 and 16-17, which are even less that 1 % of the turnovers as compared to A Y 17-18, 18-19 & 19-20. Thus, the trading results of these 2 years should not be compared with the trading results of assessment year 2017-18, 18-19 and 19-20. The fall in GP rate during the year under consideration i.e. 2017-18 is basically on account of the fact that during the preceding year the assessee sold only silver bullion, whereas in the year under consideration the assessee had also sold gold bullion also. The product mix of the sales has changed and since gold is a high values commodity hence the profit margins are also very less, it’s a turnover business. Further, the difference in bullion rates as the gold and silver bullion rate fluctuated a lot in financial year 2016-17 relevant to assessment year 2017-18 and the bullion trade totally runs on the prevalent rate in the market which saw a great fluctuation during the year. Since, there were great fluctuations during the year and as per the commitment the assessee it had to fulfill the sales order at the contracted price, hence, there has been a small downfall in the GP rate, which we would request your honour to be accepted, as all our sales and purchases are fully vouched. 3. We have already submitted the stock summary before your honour which was already there in the Tax Audit Report at clause 35(a). In the said stock summary the purchases in quantity is clearly mentioned and corresponding sales are also clearly mentioned before your honour. The stock details are as follows: OPENING PURCHASE IN CLOSING STOCK MONTH STOCK IN SALE IN KG KG IN KG KG Apr-16 34.514 320.979 238.480 117.013 May-16 117.013 0.000 0.000 117.013 Jun-16 117.013 0.000 0.000 117.013 Jul-16 117.013 0.000 0.000 117.013 Aug-16 117.013 0.000 0.000 117.013 Sep-16 117.013 0.000 0.000 117.013 Oct-16 117.013 525.245 495.872 146.386 Nov-16 146.386 3267.795 3410.098 4.083 Dec-16 4.083 1.246 0.000 5.329 Jan-17 5.329 3.233 0.000 8.562 Feb-17 8.562 13807.517 12959.648 856.431 Mar-17 856.431 11378.287 12048.299 186.419 TOTAL 34.514 29304.302 29152.397 186.419

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The assessee is explaining the sales, and the same is duly shown as credited to the Profit & Loss account. The assessee is engaged in the bullion business and maintaining the regular stock registers. No difference was found in the stock register or the stocks of the assessee during the course of search/survey proceedings. Purchases, sales and the Stock are interlinked and inseparable. Every purchase increases the stock and every sale decreases the stock. The purchases and sales are matching with inflow and the outflow of stock. There has been no abnormal profits nor any defects in the books of accounts or stock registers or purchase invoices, sales invoices etc. to disbelief the books and to reject them. The assessee had sufficient quantity of stock and has received the stock of silver from the IDS declarants during the month of October-November 2016, as has been clearly shown in the stock summary and the stock statements. The stock received from IDS declarant is unregistered purchases on which as per the provisions of VAT Act. VAT has already been paid and the assessment order for the said assessment have also been received from the VAT department which are being enclosed herewith, wherein they have accepted the unregistered purchases and have accepted the tax paid by us on the said unregistered purchases. The VAT department’s primary onus is to tax the purchases and sales and to verify and justify the same, which has already been done by them, being a revenue department and after considering all our submissions they have accepted the VAT returns filed by the assessee clearly depicting the purchases made in this regard. Since one revenue department of the government has already accepted the purchases, the same cannot be disallowed or thought to be ungenuine when the trading results are being accepted by the VAT department and the books of accounts are being duly accepted. 4. The silver bought from IDS declarant was against the purchase invoices issued to them and all the payment to the IDS declarant has been made through banking channel and has been duly depicted before your honour in the bank statements also. The IDS declarants have also confirmed the sales made by them to the assessee and have duly confirmed the same in their statements under section 132(4) of the Income Tax Act at the time of search proceedings and also in post search proceedings. 5. The fact is that all the IDS declarants in their statements under section 132(4) or 131 have clearly stated in univocal terms that they have sold silver bullion before 8th November 2016, by delivering it at the business premises and have also received the payment through banking channels. Further, during the entire search operations nowhere from the IDS declarant’s premises or from the Sushil Chauhan group any silver bullion which was declared by the IDS declarants has been found or seized. Thus, when all of the IDS declarant and Sushil Chauhan in their statements under section 132(4) or 131 have stated that they have sold silver bullion before 8th November 2016, then, we would request your honour that if any evidence is there the same may kindly be confronted to us. 6. All the sales affected have been out of the stock which was duly shown in its books of accounts. We are enclosing the stock summary sheet monthwise /datewise to prove the availability of stock from which sales have been effected.

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Hope your honour shall find it in order and we shall be glad to furnish any other information/ documents in regard to the proceedings before your honour if the above reply is not found satisfactory or lacking in some regard.”

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the assessment proceedings. Therefore, it was argued that the books of accounts should not have been rejected by the AO and the addition for estimating the gross profit and the cash deposit during demonetisation period of ₹12.97 crores was unwarranted for. During the course of the hearing before us, a brief synopsis has been submitted by the Ld AR, the same are reproduced below : 1. With regard to the addition of Rs 1,86,29,800/- for estimation of GP @ 1.11% the Ld. AO rejected the books of accounts without assigning any specific defects in the said books of accounts even though the same were independently audited by a chartered accountant and no adverse inference was ever drawn in them, the same books of accounts have been duly accepted in the search assessments for other years, i.e AY 2013-14 to 2019-20, except for the said year. No specific defects were pointed out before rejecting the said books of accounts and were rejected only on the assertion that cash was deposited during demonetization period. The comparative trading results have been tabulated at AO order page 29, wherein during the year under consideration GP rate was 0.10% however the Ld. AO chose to apply the GP rate of 1.11% for the year. Proper stock records were maintained by the appellant and the monthly sale / purchases figures were also provided to the Ld. AO, bills and vouchers were also produced during the course of assessment proceedings. It has been further held in the case of International Forest Co. vs CIT101 ITR 721 by the Honorable Jammu and Kashmir High Court, that : “24. We would also like to observe that even if the income tax officer considered the material placed before him by the assessee to be unreliable keeping in view the comparative statement of accounts of previous years, he could not proceed to make an arbitrary addition and base his conclusion purely on guesswork. He ought to have related his estimate to some evidence or material on record as it is now well settled that if the profits shown by the assessee in his return are not accepted, it is for the taxing authorities to prove that the assessee made more profits.” No addition can be made in the trading results without any material on record and without pointing out any defect, either in the method of accounting of the assessee, or in the books of account maintained by the assessee. It has been so held, inter-alia, in the following cases: - J.A. Trivedi Brothers vs. CIT, 158 ITR 705 (MP)

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- CIT vs. Modi Enterprises, 2 DTR 47 (Raj.) - CIT vs. Realest Builders & Services Ltd., 307 ITR 202 (SC) - Aluminium Industries (P) Ltd. vs. CIT, 80 Taxman 184 (Gau). - Malani Ramjivan Jagannath vs. ACIT, 207 CTR (Raj.) 19 - Madnani Construction Corporation (P.) Ltd. v. CIT [2008] 296 ITR 45 (Gau. - Pyarelal Mittal v. Asstt. CIT [2007] 291 ITR 214 (Gau.) - CIT Karnal v. Om Overseas, [2008] 173 Taxman 185 (P&H) the High Court has overturned any rejection of the books, bereft of justification and pinpointing the deficiencies in the audited books of accounts. 2. With regard to the Ld. AO’s contention of cash deposit during demonetization period of Rs. 12,97,00,000/- in the bank account of appellant, we would like to state that as mentioned in PB page 48 the comparative sales figure are as follows: AY Sales Cash sales Credit sales 2015-16 1,39,17,042 64,13,074 75,03,961 2016-17 1,16,05,430 36,84,541 79,20,889 2017-18 1,80,80,60,352 19,17,24,547 1,61,63,35,805 2018-19 1,12,10,92,069 34,07,636 1,11,76,84,433 2019-20 2,35,10,032 - 2,35,10,032

Thus the cash sales as a comparison to total sales is very minuscule for the appellant. The appellant had adequate stock in hand which is mentioned at page 49 of the paper book, where monthly stock summary is mentioned. Sales was effected from this stock in hand which the assessee had. The silver was brought from IDS declarant who have confirmed the sales made to the appellant in their statements u/s 132(4) at the time of search proceedings at their premises. It has been established that there were cash sales in these months due to Diwali festival and wedding season. In the VAT assessment orders of appellant the sales and purchase have been duly accepted by authorities PB page 40-44. The persons from whom silver bullion was purchased were also covered in the search proceedings and none of the person have denied of making sales to appellant during the entire search proceedings. In their assessment and appellate proceedings their sales have been accepted as such, thus when the sales made by the IDS declarants have been accepted, hence to hold that the purchases made by the appellant were questionable would not be prudent and correct. Further, as per the tax audit report adequate stock was depicted and shown in the said report. The payment to these persons was made after delivery of silver bullion as they were not regular dealer of bullion. Further, the payments for all

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these persons were made within a short span of time by way of banking channel, further when silver was purchased from these persons VAT was paid under reverse charge which was modvatable, hence there was no loss when silver was brought from these unregistered persons. These transactions were duly shown in the VAT returns which have already been accepted by VAT department. The contention of the Ld. AO that there were similarity in printing errors of purchase invoice as “dot silver” was mentioned, it was purposely done to identify that this silver bullion was bought from unregistered persons and we had the liability to pay 1% input VAT on them. Hence it was purposely done to segregate the unregistered purchases from registered purchases which is not unusual and to say that this was a clinching piece of evidence would be irrelevant. We would also like to mention that no undeclared silver was found from the premises of the IDS declarant nor from Sushil Chauhan's place, then if the silver was not genuinely sold then where was it has not been addressed by the Ld. AO. The appellant had adequate cash in hand of Rs. 13,48,95,596/- as of 08-11-2016, PB page 18 out which Rs. 12.97 cr was deposited as SBN during demonetization period. 3. Further during the course of the assessment proceedings, the appellant had submitted the following details before the Ld. AO to prove the cash sales effected by them. - VAT Return for FY 2016-17 - VAT Order for FY 2016-17 - Quantitative Monthly Stock Summary - Cash flow statements for AY 2016-17, 2017-18 - Copy of Purchase vouchers etc. All these documents are being annexed as part of paper book before your honour. 4. The appellant places reliance of the following case laws where similar kind of additions have been deleted. a. In DCIT vs SPR Jewels Pvt. Ltd. In ITA no 2723/Del/2024 (Del ITAT) dated 30-9-2025, b. The Hon’ble ITAT, Mumbai, in the case of DCIT vs. Kundan Jewellers Pvt. Ltd., in ITA No. 1035/Mum/2022 dated.- May 29, 2023. c. ITO Vs Manasa Medicals (ITAT Bangalore) ITA No. 552/Bang/2022 Dated: 31/10/2022. d. In Hirapanna Jewellers v. ACIT in ITA No.253/Viz/2020 [2021] 128 taxmann.com 291 (Vishakhapatnam – Trib.) vide order dated 12.05.2021, e. THE ITAT DELHI BENCH 'B' Fine Gujaranwala Jewellers vs. Income-tax Officer [2023] 151 taxmann.com 340 (Delhi - Trib.)

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f. THE ITAT AMRITSAR BENCH Balwinder Kumar vs. Income-tax Officer [2023] 151 taxmann.com 338 (Amritsar - Trib.) g. The Hon’ble HIGH COURT OF DELHI in PCIT v. Agson Global (P.) Ltd[2022] 134 taxmann.com 256 (Delhi) h. THE ITAT MUMBAI BENCH 'SMC' R. S. Diamonds India (P.) Ltd. v. ACIT [2022] 145 taxmann.com 545 (Mumbai - Trib.) i. IN THE ITAT JAIPUR BENCH 'B' Mahesh Kumar Gupta v. ACIT [2023] 151 taxmann.com 339 (Jaipur - Trib.) j. IN THE ITAT CHANDIGARH BENCH 'A' Smt. Charu Aggarwal v. DCIT [2022] 140 taxmann.com 588 (Chandigarh - Trib.) k. In the case of Salem Sreeramavilas Chit Company (P.) Ltd. v. DCIT HIGH COURT OF MADRAS [2020] 114 taxmann.com 492 (Madras) 5. We would also like to state before your honours that the Ld. AO has rejected the books of accounts of the appellant and has estimated the GP on the sales less amount deposited during demonetization period, and then has further made addition u/s 68 as cash credits for the amount deposited in bank account in demonetization period in SBN Thus, when the Ld. AO has rejected the books of accounts then he is precluded from placing reliance on the same books of accounts for making addition u/s 68 for cash deposited in bank account as unexplained cash credit u/s 68 of the Act. - CIT vs Dulla Ram [2014] 42 taxmann.com 349 (Punjab & Haryana) - CIT vs Bahubali Neminath Muttin [2016] 73 taxmann.com 100 (Karnataka)”

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purchases were made by unregistered persons, whereas the assessee generally buys Silver from registered dealers only. He also argued that in these cases, the payments were made after the Silver was delivered to the assessee which was against the general trade practice. It was argued by the Ld CIT - DR that since huge cash was deposited during the demonetisation period in specified bank notes, hence the same was not treated as genuine sales of the assessee. The addition made by the AO under section 68 being unexplained cash credit was rightly made and he supported the order of lower authorities. 10. Considered the rival submissions and material placed on record. We observed that assessee is running a business of Trading in Silver bullion. During the course of assessment proceedings, the AO asked for various details at various points of time and the assessee had filed detailed replies and necessary documents in response to AO's notices wherein the assessee filed detailed analysis of cash sales made in AYs 2016-17, 2017-18 and AY 2018-19 and also filed necessary stock details as called for. We observed that the assessee also filed VAT returns as submitted to the VAT authorities which have been accepted by the VAT authorities. We observe that the AO even though acknowledged furnishing of above details but did not unearth any inconsistencies or discrepancies in the details submitted by the assessee.

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We further observed that without giving proper reasoning or brought on record any inconsistencies, the AO merely rejected the books of accounts and proceeded to make the addition. We further observed that the Assessee furnished a detailed chart of monthly cash sales and cash deposits in bank a/c which was reconciled with reference to cash book and from this chart it is noticed that the assessee was having cash balance of Rs. 13,48,95,596/- as on 8-11-2016. Hence the above facts clearly substantiates that the assessee was having sufficient cash balance as on 09.11.2016 to deposit the same in bank accounts. The assessee also substantiated the cash sales with reference to available stock in the premises which was shown in the books of accounts. The AO rejected the books of accounts summarily without pinpointing any defects in the same, as has been brought out before us and that too were rejected at the fag end of the assessment proceedings. It has been held by various courts that rejection of books of accounts without pinpointing specific defects in the same cannot be upheld, hence we have no hesitation in accepting the audited books of accounts of the assessee, and the trading results of the assessee. 11. The assessee filed details before AO to substantiate the sources of cash deposits during the demonetization period during assessment proceedings, but the AO did not establish any deviations in the above details submitted

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before him. The purchases made from the IDS declarant have all been held to be genuine purchases in the appellate proceedings of those IDS declarants. Once the purchases have been proved to be genuine for the reason that the same was accepted in their hands, there is no option for the AO to disbelief the sales, when the quantitative details of the sales, purchases have all been submitted before the AO wherein he has not found any fault or deviation. Even the VAT authorities have accepted the sales, purchases made by the assessee. The assessee submitted the quantitative monthly stock summary, cash flow statements and the purchase vouchers along with the sales Ledger to prove the purchases and the sales made wherein the AO has not found any fault and the AO simply turned a blind eye towards the assessee's submissions as the AO did not unearth any inconsistencies or discrepancies in details given by the assessee, which were plausible answered or rebutted by the assessee. The AO simply proceeded to reject the details summarily without any reasoned order. Accordingly, we observe that the AO failed to bring out the basis for the addition made by him. 12. The action of the AO is largely influenced by consideration not borne from records. It is settled position in law that suspicion however so strong cannot be allowed to take the place of proof. The Court must be

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watchful and ensure that conjectures and suspicions do not take the place of legal proof. Hon’ble Supreme Court in the case of Jaharlal Das v. State of Orissa, reported in (1991) 3 SCC 27, has observed in para 9 that caution must be borne in mind that in cases depending largely upon circumstantial evidence there is always a danger that the conjecture or suspicion may take the place of legal proof and such suspicion however strong cannot be allowed to take the place of proof. 13. In this regard it has been held by various courts that the amount deposited in demonetisation period were genuine business transaction and hence the additions made were deleted, some of the judicial decision are as follows: - Hon’ble I.T.A.T. Vishakhapatnam in the case of ACIT vs. Hirapanna Jewellers[2021] 128 taxmann.com 291 (Vishakhapatnam – Trib.) held as under: “…The A.O. made addition under section 68 on account of huge cash amount deposited by assessee-jeweller in its bank account post demonetization since assessee had explained source of said cash deposits as sales of jewellery, produced sale bills and admitted same as revenue receipt as well as offered it to tax and assessee also represented outgo of stocks which was matching with sales impugned addition was to be deleted….” - In DCIT vs SPR Jewels Pvt. Ltd. In ITA no 2723/Del/2024 (Del ITAT) dated 30-9- 2025, it was held as under : “The assessee also substantiated the above cash sales with reference to available stock in the premises which was shown in the books of accounts. We observe that the assessee filed details to substantiate the sources of cash deposits during the demonetization period during assessment proceedings but the AO did not establish any deviations in the above details but the AO simply turned a blind eye towards the assessee's submissions and the AO did not unearth any inconsistencies or discrepancies in details given by the assessee but simply proceeded to reject the details summarily without any reasoned order. Accordingly, we observe that the AO failed to bring out the basis for the addition made by him. Therefore, we hold that the ld. CIT (A) rightly deleted the addition made by the AO on account of unexplained cash credits which is totally baseless and not substantiated. Accordingly, we are inclined to uphold the order of the ld.

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CIT (A) who has passed a speaking order. Hence, the Revenue’s grounds are hereby deleted.” - The Hon’ble ITAT, Mumbai, in the case of DCIT vs. Kundan Jewellers Pvt. Ltd., in ITA No. 1035/Mum/2022 dated.- May 29, 2023. - ITO Vs Manasa Medicals (ITAT Bangalore) ITA No. 552/Bang/2022 Dated: 31/10/2022. - The ITAT Delhi Bench in Fine Gujaranwala Jewellers vs. Income-tax Officer [2023] 151 taxmann.com 340 (Delhi - Trib.) - The ITAT Amritsar Bench in Balwinder Kumar vs. Income-tax Officer [2023] 151 taxmann.com 338 (Amritsar - Trib.) - The Hon’ble HIGH COURT OF DELHI in PCIT v. Agson Global (P.) Ltd[2022] 134 taxmann.com 256 (Delhi) - THE ITAT MUMBAI BENCH 'SMC' R. S. Diamonds India (P.) Ltd. v. ACIT [2022] 145 taxmann.com 545 (Mumbai - Trib.) - The ITAT Jaipur Bench in Mahesh Kumar Gupta v. ACIT [2023] 151 taxmann.com 339 (Jaipur - Trib.) - The ITAT Chandigarh Bench in Smt. Charu Aggarwal v. DCIT [2022] 140 taxmann.com 588 (Chandigarh - Trib.) - In the case of Salem Sreeramavilas Chit Company (P.) Ltd. v. DCITHIGH COURT OF MADRAS [2020] 114 taxmann.com 492 (Madras)

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sales, and the cash deposited during demonetization period of Rs. 12.97 crores being out of the cash in hand available with the assessee on 09-11- 2016, hence the addition made for the same u/s 68 of the Act as cash credit is hereby deleted. The addition made for estimating the gross profit of the assessee at Rs.1,86,29,800/- by the AO after rejecting the audited books of accounts is also here by deleted. Hence, the assessee’s grounds are hereby allowed. 15. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on this 22nd day of June, 2026.

Sd/- sd/- (SUNIL KUMAR SINGH) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 22.06.2026 TS