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Facts
The assessee filed a return for AY 2017-18, and during scrutiny, the Assessing Officer (AO) added Rs. 1,53,91,432/- under Section 68 for unexplained cash deposits. The CIT(A) subsequently allowed the assessee's appeal, which led the Revenue to appeal to the ITAT.
Held
The Tribunal noted that the assessee had furnished extensive documentation, including cash book, sales invoices, bank statements, and customer ledger accounts, which were not disputed by the Assessing Officer in the remand report. Since the CIT(A) had already allowed the appeal based on these sufficient evidences, the Tribunal found no reason to overturn the decision.
Key Issues
Whether the CIT(A) was correct in deleting the addition under Section 68 for unexplained cash deposits, specifically regarding the sufficiency of evidence for identity, creditworthiness, and genuineness of cash sales and reasons for cash withdrawals and redeposits.
Sections Cited
Section 68
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Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD
Before: DR. BRR KUMAR & MS. SUCHITRA KAMBLE
O R D E R
PER SUCHITRA KAMBLE - JM:
This appeal has been filed by the Revenue is filed against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi on 16.01.2025 for Assessment Year 2017-18.
The grounds of appeal raised by the Revenue read as under: 2.
“(a) The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 1,53,91,343/- made by AO on account of unexplained cash deposit in bank account u/s 68 of the Act despite the fact that: (i) The assessee has failed to furnish sufficient documents to establish the identity, creditworthiness and genuineness of transaction of cash sales. (ii) The assessee has failed to submit any cogent reason for cash withdrawals and deposit of the same again in the bank account.
ITO vs. Sureshbhai Gafulbhai Valiya Asst.Year–2017-18 - 2 - (b) The appellant craves leave to add, alter and / or to amend all or any the ground before the final hearing of the appeal.”
The assessee is an individual filed return of income for A.Y. 2017-18 on 11.08.2017 declaring total income of Rs. 4,95,850/-. The case was selected for scrutiny under CASS to verify cash deposits. The Assessing Officer completed the assessment and made addition of Rs. 1,53,91,432/- under Section 68 of the Act as unexplained cash deposits.
Aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) allowed the appeal of the assessee.
The Ld. DR submitted that the CIT(A) erred in deleting the addition of Rs. 1,53,91,343/- despite the fact that the assesse failed to furnish sufficient documents to establish the identity creditworthiness and genuineness of the transaction of the cash sales. The Ld. DR further submitted that the assessee failed to submit any cogent reason for cash withdrawals and deposit of same in the bank account.
The Ld. AR relied upon the order of CIT(A).
We have heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the assessee during the appellate proceedings have filed the details related to the cash deposits and the cash withdrawals in respect of its cash collection from customers from the embroidery work done by the assessee. The submissions before the CIT(A) is most specifically reproduced in Para 6.2.2 by the CIT(A) of the order dated 16.01.2025. The CIT(A) has called for the remand report and the same is reproduced in Para 6.2.3 of the said order. The said remand report clearly stated that the assessee submitted the copy of assessment order, cash book, the ITO vs. Sureshbhai Gafulbhai Valiya Asst.Year–2017-18 - 3 - sample cash sale invoices as well as the copy of bank account statement alongwith copy of ledger account of customer application. The said details were not doubted by the Assessing Officer in his remand report and therefore, categorically the CIT(A) has allowed the appeal of the assessee. There is no discrepancy pointed out by the Ld. DR in respect of these evidences and therefore, the appeal filed by the Revenue does not survive.
In the result, the appeal filed by the Revenue is dismissed. This Order pronounced in Open Court on 25/08/2025