TATVAM JEWELS CORPORATION,JAIPUR vs. INCOME TAX OFFICER, INCOME TAX DEPARTMENT

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ITA 922/JPR/2025Status: DisposedITAT Jaipur29 October 2026AY 2017-187 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the appeal. Regarding the first ground, the judgment does not explicitly state whether a personal hearing was granted or denied, nor does it discuss the assessee's contention regarding the violation of natural justice. However, the Tribunal proceeded to decide the appeal on merits. On the second ground, the Tribunal upheld the addition of Rs. 29,00,000. The Tribunal noted that the cash sales between November 2, 2016, and November 5, 2016, amounting to Rs. 29 lakhs, were made without mentioning the name, address, or contact number of the buyer, and the description of goods was vague ('22 carat gold jewellery'). The Tribunal found that the assessee failed to discharge the initial onus of providing proper explanations with relevant evidence. The Tribunal distinguished the reliance on case laws by the assessee, noting that they pertained to the demonetization period from November 8, 2016, onwards, whereas the cash deposits in this case were prior to that period and remained unexplained. Consequently, the Tribunal held that the orders passed by the lower authorities did not require interference and the grounds raised by the assessee were devoid of merit.

What were the facts?

The assessee, Tatvam Jewels Corporation, engaged in gold jewellery manufacturing, filed its return for AY 2017-18 declaring an income of Rs. 3,13,280. The case was selected for scrutiny. The assessee reported a turnover of Rs. 3,44,44,131 and a gross profit rate of 21.24%. The Assessing Officer (AO) noted cash sales of Rs. 29 lakhs between November 2, 2016, and November 5, 2016, deposited into the assessee's bank accounts. These sales invoices lacked purchaser details and described only '22 carat jewellery'. The AO also observed no cash sales prior to this period despite available stock. The assessee explained that details were not required for sales below Rs. 2 lakhs and that VAT returns were filed. The AO was not satisfied and added Rs. 29 lakhs to the total income, also disallowing Rs. 1,91,315 towards wages. The CIT(A) deleted the addition on wages but upheld the Rs. 29 lakhs addition.

What were the issues?

1. Whether the Commissioner of Income Tax (Appeals) [CIT(A)] erred in not granting an opportunity of personal hearing as envisaged under Section 250 of the Income Tax Act, 1961, thereby violating principles of natural justice, and if so, whether the order deserves to be quashed? 2. Whether the CIT(A) erred in dismissing the assessee's ground of appeal concerning the addition of Rs. 29,00,000 as unexplained cash under Section 68 read with Section 115BBE of the Act, and if so, whether relief should be granted by quashing the order? Assessee's Contentions: - The CIT(A) violated principles of natural justice by not providing a personal hearing. - The addition of Rs. 29,00,000 is illegal and unjustified. Revenue's Contentions: - The CIT(A) observed that the assessee did not provide sufficient explanation or credible evidence to the AO or during appellate proceedings to prove the genuineness of the cash sales. The CIT(A) concluded that the AO was correct in treating the bills as fake and making the addition under Section 68 read with Section 115BBE of the Act.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 250,Section 68,Section 115BBE,Section 246

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH, JAIPUR

Before: Smt. Annapurna Gupta & Shri T. R. Senthil Kumar

For Appellant: Shri Utkarsh Mishra &

आदेश/ORDER

PER : T. R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the assessee as against the appellate order dated 21.04.2025 passed by Commissioner of Income Tax (Appeal), National Faceless Appeal Centre (NFAC), Delhi, arising out of assessment order passed u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Asst. Year 2017-18.

2.

Brief facts of the case are that the assessee is engaged in the business of manufacturing of gold jewellery. For the A.Y. 2017-18,

I.T.A No. 922/JPR/2025 Page No 2 Tatvam Jewels Corporation

assessee has filed its return of income declaring total income of Rs. 3,13,280/- and thereafter filed revised return declaring the same income. The case was selected for complete scrutiny assessment. During the year under consideration, the assessee has shown turnover of RS. 3,44,44,131/- and declared gross profit of Rs. 73,16,848/- which resulted gross profit rate of 21.24%, whereas the assessee has not conducted any business activity in previous year. On perusal of the books of account, the AO found that assessee has made cash sale of jewellery during 02.11.2016 to 05.11.2016 of Rs. 29 lakhs and the same was deposited in its bank accounts. On perusal of sale bills revealed that there is no name, address, mobile no. of the purchaser on these sales bill, further, the amounts are between Rs. 1,35,000/- to 1,99,000/-. The AO observed that no cash sales made prior to 02.11.2016, though sufficient stock of jewels were available with the assessee’s firm. Further, the invoices carries only 22 carat jewellery and no description of the ornament namely ring, neckles, churi, etc. Further the cash sales made by the assessee from 05.11.2016 to 31.03.2017 only to the amount of Rs. 5,88,314/- which was a big season of marriages and festivals, therefore the assessee was asked to explain the cash sales made between 02.11.2016 to 05.11.2016. The assessee replied it does not require to maintain the name, address of the buyers since the bills were less than Rs. 2 lakhs and it has sufficient stock and also filed regular VAT returns, therefore no addition is required to be made on this count. After considering the above submission of the assessee, Ld. AO was not satisfied with the reply given by the assessee, thereby made addition of Rs. 29 lakhs and

I.T.A No. 922/JPR/2025 Page No 3 Tatvam Jewels Corporation

also made disallowance of wages of Rs. 1,91,315 and added to the total income of the assessee.

3.

Aggrieved against the assessment order, assessee filed the appeal before Ld. CIT(A) who deleted the addition on account of wages, however confirmed the addition of Rs. 29 lakhs by observing as follows:-

“5.5 The stand of the appellant that A.O. could not ask any question regarding sales below 2 lakhs cannot be acceptable. The case before the AO was under complete scrutiny and in the interest of revenue any question could have been asked by the AO within the four corners of the legal provision to determine the genuineness of the transactions. The appellant was duty bound to submit the requisite details before the AO especially in such a situation where the AO has provided sufficient reasoning to the appellant and all the situational evidences clearly establishing that the appellant has introduced his own unexplained income and unaccounted wealth in his books of accounts and in the bank account. The moot question arises that the appellant should have left no stone unturned by submitting reasonable explanation based on credible evidence and material facts in order to prove the AO's contention wrong if he so genuinely wanted. The appellant did not even bother to try to submit details before the AO. The non-compliant/evasive attitude of the appellant did not change even during the appellate proceedings. Hence, all the evidences clearly reveal that the assessee has created balances by issuing sale bills without identification marks.

Considered. The arguments of the appellant, his submission and the arguments of the AO in the impugned Assessment Order have all been compressively probed and analyzed and in the result it is concluded that the action of the AO in treating the bills as fake and ingenuine and addition of Rs.29,00,000/- as unexplained cash u/s 68 r.w.s. 115BBE of the Act to the income of the appellant is correct. Therefore, the addition of Rs. 29,00,000/- is

I.T.A No. 922/JPR/2025 Page No 4 Tatvam Jewels Corporation

held as sustained and accordingly, the ground no. 1 raised by the appellant is dismissed.”

4.

Aggrieved against the appellate order, assessee is in appeal before us raising the following grounds of appeal:-

“1. In the facts and circumstances of the case and in law, Ld. CIT(A) has erred by not granting an opportunity of personal hearing as envisaged u/s 250. The action of Ld. CIT(A) is illegal, unjustified, arbitrary and against the law. The order deserves to be quashed due to blatant violation of the principles of Natural Justice. 2. In the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in dismissing Ground No.1 of the appeal filed u/s 246 in relation to addition of Rs. 29,00,000/- as unexplained cash u/s 68 r.w.s. 115BBE of the Act. The action of the Ld. CIT(A) is illegal, unjustified and against the law. Relief may please be granted by quashing the order passed u/s 250. 3. The assessee craves its rights to add, amend or alter any of the grounds on or before the hearing.” 5. Heard the rival submissions and perused the materials available on record including written submission and paper book filed by the assessee. On perusal of the ledger account of local sales at page no. 68 of the Paper Book, the assessee has made cash sales between 02.11.2016 to 05.11.2016 which was added by the AO as unexplained. After 05.11.2016, there were no cash sales, however between 03.12.2016 to 20.12.2016, there was cash sales which were less than of Rs. 50,000/- each. On perusal of the assessment order, the assessee was asked to explain the cash sales done between 02.11.2016 to 05.11.2016 which is amounting to Rs. 29 lakhs. The assessee also placed on record the invoices at page no. 39 onwards of the Paper Book relating to cash sales. For ready reference, one invoice copy is reproduced as under:-

I.T.A No. 922/JPR/2025 Page No 5 Tatvam Jewels Corporation

I.T.A No. 922/JPR/2025 Page No 6 Tatvam Jewels Corporation

6.

Further perusal of other invoices also simply mention cash sales without mentioning name of the buyer, address of the buyer, contact no. of buyer. The description of the goods specify that 22 carat gold jewellery without mentioning what kind of ornaments sold to the parties. Thus, the initial onus caste upon the assessee is not fully discharged by giving proper explanation, though the invoices are below 2 lakhs. The case laws relied by the assessee are clearly distinguishable with the facts of the present case, the case laws relied mainly during the demonetisation period from 08.11.2016 onwards whereas in the present case, the cash deposits are prior to demonetization period which is not explained by the assessee with relevant evidences before the lower authorities. Thus the orders passed by lower authorities do not require any interference. Resultantly, the grounds raised by the assessee are devoid of merits and liable to be dismissed.

7.

In the result, the appeal filed by the assessee is hereby dismissed. Order pronounced in the open court on 29-10-2026

Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated 29/10/2026 Dhananjay K., Sr. PS आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT

I.T.A No. 922/JPR/2025 Page No 7 Tatvam Jewels Corporation

4.

CIT (A) Digitally signed by Dhananjay Kumar 5. DR, ITAT Date: 2026.11.03 6. Guard file. '11:52:27 +05'30 By order/आदेश से, सहायक पंजीकार आयकर अपील�य अ�धकरण, जयपुर

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