SUNIL KUMAR CHOPRA,DELHI vs. ITO-WARD-43(6), DELHI

ITA 3813/DEL/2026Status: DisposedITAT Delhi29 September 2026AY 2017-188 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that no addition could be made under Section 68 for cash deposited during the demonetization period when the books of account were not doubted and the sales declared by the assessee were accepted. The Tribunal noted that the assessee had submitted all details regarding cash sales, including sales bills, sales register, daily cash book, stock register, and VAT returns, which were not disputed by the AO. The Tribunal relied on the coordinate bench decisions in Kanchan Chopra and Deepak Sharma, which held that once purchases and sales are accepted and supported by stock availability, cash deposits arising from such sales cannot be treated as unexplained credits. The Tribunal also observed that the addition would lead to double taxation as the sales were already part of the declared income. Regarding Section 115BBE, since the addition under Section 68 was deleted, the issue became academic and required no adjudication. The Tribunal directed the deletion of the addition.

What were the facts?

The assessee, engaged in general merchant trading, filed a return of income for Assessment Year 2017-19 declaring Rs. 17,90,650/-. The case was selected for scrutiny due to cash deposits during demonetization, custom duty paid, and sales turnover. The Assessing Officer (AO) treated Rs. 1 crore cash deposited in the bank account during demonetization as unexplained credit under Section 68 of the Income Tax Act, 1961, and invoked Section 115BBE for special tax rates. The CIT(A) upheld the addition, comparing cash sales and deposits with the preceding year and finding the source unexplained. The assessee appealed to the ITAT.

What were the issues?

1. Whether the addition of Rs. 1,00,00,000/- under Section 68, read with Section 115BBE, is sustainable when the cash deposit is claimed to be from cash sales duly recorded in the Profit & Loss Account and supported by sales bills, sales register, daily cash book, and stock register? The assessee argued that all relevant details were provided, and no deficiency was pointed out. The revenue contended that the cash sales were not substantiated by buyer details and were significantly higher than in the preceding year. 2. Whether Section 115BBE is applicable to the facts of the case, as it was invoked for debits in the bank book and simultaneous credit in the bank account? The judgment does not explicitly record arguments on this specific point for either side, but it is raised as a ground of appeal by the assessee. 3. Whether the addition made under Section 68, read with Section 115BBE, is sustainable without complying with the mandatory provisions of Section 145(1), which requires income computation based on maintained books of account? The assessee argued that the AO erred by not computing income based on books of account. The revenue supported the lower authorities' orders.

Which sections of the Income-tax Act were involved?

Section 68,Section 115BBE,Section 143(3),Section 145(1),Section 250

AI-generated summary — verify with the full judgment below

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

Before: SHRI VIMAL KUMAR & SHRI MANISH AGARWAL

For Appellant: Shri S.K. Gupta, CA
For Respondent: Ms. Harpreet Kaur Hansara, Sr. DR
Hearing: 23/07/2026Pronounced: 29/09/2026

PER MANISH AGARWAL, AM: This appeal is filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [‘CIT(A)’ in short] in Appeal No. CIT(A), Delhi-15/10634/2019-20 dated 29.09.2025 passed u/s 250 of the Income Tax Act, 1961 (the Act, in short) arising out of the assessment order dated 27.12.2019 passed u/s 143(3) of the Act for Assessment Year 2017-19. 2. Brief facts of the case are that the assessee was an individual and engaged in the business of trading of general merchant. The return of income was filed declaring total income at Rs.17,90,650/-. The case was selected for scrutiny for the reason (1)

Sh. Viren Chopra L/H Late Sunil

The order continues below.

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