DEPUTY COMMISSIONER, CENTRAL CIRCLE, SHIMLA, SHIMLA AT CHANDIGARH vs. BUDHAMAL AND SONS JEWELLERS, HIMACHAL PRADESH

ITA 1500/CHANDI/2025Status: DisposedITAT Chandigarh05 October 2026AY 2017-186 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the Revenue's appeal. Regarding the Rs.81 Lacs addition, the Tribunal found that the cash deposits were duly evidenced by the cash book, audited financial statements, and VAT returns. The assessee successfully demonstrated that the cash deposits were sourced from available cash in hand in the cash book, representing proceeds of its regular jewellery business turnover. The Tribunal held that a mere increase in cash sales, where recorded in regular books, could not be conclusive, and making this addition would amount to double taxation. Therefore, the CIT(A)'s deletion was upheld. For the Rs.60 Lacs addition, the Tribunal agreed with the CIT(A)'s finding that this was a duplicate addition as the bank account was already considered while computing the Rs.81 Lacs. For the Rs.25.14 Lacs and Rs.2.50 Lacs additions, the Tribunal noted that bank certificates confirmed these accounts did not belong to the assessee-firm, thus the additions could not be made in its hands. No issue was expressly left undecided.

What were the facts?

The Revenue is in appeal against the order of the CIT(A) deleting additions of Rs.1,68,64,210/- made by the AO for Assessment Year 2017-18. The additions included Rs.81 Lacs for cash deposits, Rs.60 Lacs for one bank account, and Rs.25.14 Lacs and Rs.2.50 Lacs for other bank accounts allegedly not belonging to the assessee-firm. The assessee, a jewellery trading firm, had declared Rs.45.15 Lacs income. The AO initiated reassessment proceedings under Section 147 r.w.s. 144B, making additions under Section 69A and applying higher tax rates under Section 115BBE. The CIT(A) deleted these additions, leading to the present appeal by the Revenue.

What were the issues?

1. Whether the deletion of addition of Rs.81 Lacs on account of cash deposits, which the assessee claimed represented regular cash sales duly recorded in its books, was justified, turning on the interpretation of Section 69A and Section 115BBE. 2. Whether the deletion of addition of Rs.60 Lacs, which the assessee argued was a duplicate addition already accounted for in the Rs.81 Lacs, was correct. 3. Whether the deletion of additions of Rs.25.14 Lacs and Rs.2.50 Lacs, relating to bank accounts stated to not belong to the assessee-firm, was legally sustainable. Assessee's Contentions: The cash deposits represented recorded business sales. The AO failed to demonstrate suppression of sales or stock, or that cash represented income from outside regular business. For the other additions, bank certificates and CIT(A)'s findings were relied upon. Revenue's Contentions: There was a substantial increase in cash deposits during demonetization, and the assessee failed to establish satisfactory primary evidence for the source. The AO's additions were based on available record and should not have been deleted.

Which sections of the Income-tax Act were involved?

Section 69A,Section 147,Section 144B,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, CHANDIGARH

Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI RAJESH DAMODARLAL SHARMA, JM

For Respondent: Shri Vivek Vardhan (Addl.CIT) – Ld. Sr. DR
Pronounced: 05.10.2026

RAJESH DAMODARLAL SHARMA (Judicial Member)

1.

Aforesaid appeal by revenue is directed against the order passed by the learned Commissioner of Income Tax (Appeals)-3, Gurgaon on 28.08.2025 in the matter of an assessment as framed by Ld. AO u/s 147 r.w.s. 144B of the Act on 25.03.2022. 2. The revenue has raised various grounds challenging the deletion of additions aggregating to Rs.1,68,64,210/- as made by the Assessing Officer u/s 69A of the Act. The substantive grievance of the re

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 69A

All 15,297 judgments and leading authorities on Section 69A →

Latest GST High Court judgments

Search GST case law →