SJB AUTOMOBILES PVT. LTD.,COIMBATORE vs. ACIT, CORPORATE CIRCLE-1,, COIMBATORE

ITA 316/CHNY/2025Status: DisposedITAT Kolkata24 September 2026AY 2017-187 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that Ground No. 1, concerning the non-issuance of notice under Section 143(2), was dismissed as the assessment order clearly stated that the notice was issued and duly served. Regarding Ground No. 2, the Tribunal noted that in the remand proceedings, the AO accepted the cash sales and the cash balance available prior to demonetization. The AO's remand report indicated that a comparative study of cash sales as a percentage of total sales showed the disclosed cash sales to be within comparable limits. The Tribunal observed that cash sales as a percentage of total sales during the demonetization period (October-December 2016) were 20%, which was lower than in the earlier year (22%). Therefore, the Tribunal found force in the assessee's argument that the addition confirmed by the CIT(A) was not justified, setting aside the CIT(A)'s order on this ground. The appeal was partly allowed.

What were the facts?

The assessee, SJB Automobiles Pvt. Ltd., filed an appeal against the order of the Commissioner of Income Tax (Appeals) [NFAC], Delhi, for Assessment Year 2017-18. The appeal challenged the addition made by the Assessing Officer (AO) under Section 68 of the Income-tax Act, 1961. The AO had treated cash deposits of Rs. 1,77,75,000/- made during the demonetization period as unexplained credit, finding the assessee's explanation regarding cash collections from rural executives and delayed remittance unacceptable. The CIT(A) confirmed an addition of Rs. 1,16,63,063/-. The assessee contended that cash sales were properly accounted for and that the cash balance prior to demonetization was accepted by the AO in remand proceedings.

What were the issues?

1. Whether the assessment made under Section 143(2) is bad in law due to alleged non-issuance of notice under Section 143(2) of the Act. - Assessee's contention: No notice under Section 143(2) was issued. - Revenue's contention: Not recorded. 2. Whether the addition made by the AO under Section 68 of the Income-tax Act, 1961, and confirmed by the CIT(A), is justified in the facts and circumstances of the case. - Assessee's contention: Cash sales were properly accounted for, and the cash balance prior to demonetization was accepted by the AO in remand proceedings. The percentage of cash sales during the demonetization period was within comparable limits. Reliance was placed on the AO's acceptance of cash balance of Rs. 141.49 lakhs and cash sales in the remand report. - Revenue's contention: The explanation offered by the assessee cannot be accepted, and no necessary evidence was filed to support the contentions raised.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 142(1),Section 68,Section 133(6)

AI-generated summary — verify with the full judgment below

Before: Shri S.S. Viswanethra Ravi & Shri S.R. Raghunatha

Hearing: 01.07.2026Pronounced: 24.09.2026

PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:

This appeal filed by the assessee is directed against the order dated 19.12.2024 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi, for the assessment year 2017–18. 2. Ground No. 1 raised by the assessee relates to the alleged non- issuance of notice under Section 143(2) of the Act, and it is contended that the assessment made thereunder is bad in law. On perusal of the assessment order dat

The order continues below.

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