DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1), CHANDIGARH vs. ALLIED NOVATECH PRIVATE LIMITED, CHANDIGARH

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ITA 609/CHANDI/2024Status: DisposedITAT Chandigarh12 August 2025AY 2017-18Bench: SHRI RAJPAL YADAV, VICE PRESIDEN, SHRI KRINWANT SAHAY (Accountant Member)8 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision, confirming the deletion of the addition. It was observed that the Revenue had accepted the assessee's purchases, stock, books of account, and sales. Therefore, when the sales generating cash were accepted, depositing these proceeds into the bank account cannot be treated as unexplained, especially when the books were not rejected.

What were the facts?

The assessee, engaged in retail trade, faced an addition of Rs. 1,83,95,000/- under Section 69A by the Assessing Officer for unexplained cash deposits made during October/November 2016 (demonetization period). The AO alleged these deposits were from unexplained sources and the assessee booked bogus sales. The CIT(A) deleted this addition, stating that the AO was wrong in not accepting the declared cash sales recorded in the books of account without formally rejecting the books.

What were the issues?

Whether an addition under Section 69A for cash deposits from cash sales is justified when the assessee's books of account, including purchases, stock, and sales, have been accepted by the Assessing Officer.

Which sections of the Income-tax Act were involved?

Section 69A,Section 143(2),Section 142(1),Section 40A(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CHANDIGARH BENCH, ‘A’, CHANDIGARH

Before: SHRI RAJPAL YADAV, VICE PRESIDEN & SHRI KRINWANT SAHAY

For Appellant: Shri Parikshit Aggarwal CA &, Ms. Shruti Khandewal, Advocate

आदेश क� ��त�ल�प अ�े�षत / Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File

सहायक पंजीकार/ Assistant Registrar

609-Chd-2024 Allied Novatech Pvt. Ltd. Chandigarh. 8

1.

Draft dictated 8.8.2025 Sr.PS 2. Draft first placed before author 3. Approved draft comes to Sr.PS/PS 4 Final draft placed before author 5. Order signed and pronounced on 6 File sent to the Bench Sr.PS Clerk 7. Date on which file goes to the AR 8. Date on which file goes to the Head Clerk. 9. Date of dispatch of Order

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