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Facts
The Revenue's appeal concerns the assessment year 2017-18, arising from an order that involved proceedings under section 143(3) of the Income-tax Act, 1961. The core issue is the addition made by the Assessing Officer concerning unexplained cash deposits during the demonetization period, amounting to Rs. 1,25,97,896/-.
Held
The Tribunal found that while the assessee explained the cash deposits as originating from cash sales, there were significant discrepancies in the data presented. The Tribunal concluded that a portion of the cash sales were overbooked to justify the cash deposits, and thus, treated the excess booking of Rs. 1,25,97,896/- as unexplained cash credits.
Key Issues
Whether cash deposits made during the demonetization period were genuinely from cash sales, or if a portion represented unexplained cash credits due to overbooked sales.
Sections Cited
43B, 143(3), 68, 69A
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Income Tax Appellate Tribunal, DELHI BENCH: ‘E’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI S. RIFAUR RAHMAN
This Revenue’s appeal for assessment year 2017-18, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2024-25/1068493517(1), dated 10.09.2024 involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
Case called twice. None appears at the assessee’s/respondent’s behest. It is according proceeded ex-parte.
Learned senior departmental representative vehemently argues during the course of hearing that the CIT(A)/NFAC herein has erred in law and on facts in reversing the Assessing Officer’s action invoking section 43B disallowance of Rs.6,01,203/- in assessment order dated 31st December, 2019.
That being the case, the learned departmental representative could hardly dispute the lower appellate findings in para 4 to 4(b) at page 6 of the lower appellate discussion making it clear that the assessee could not claim the impugned expenditure pertaining to the earlier assessment years; and therefore, it sought deduction thereof after due compliance of the relevant TDS provision in the relevant financial year before us. Rejected accordingly.
The Revenue’s latter substantive ground pleads that the Assessing Officer had rightly made section 68/69A unexplained cash deposits addition of Rs.1,25,97,896/- in the lower appellate discussion, reading as under:
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Suffice to say, it has already come on record that the impugned appellate discussion has examined the instant issue of the assessee’s cash deposits at threadbare whilst concluding that only a sum of Rs.2,10,63,118/- represents its genuine cash sales. We thus find no merit in the Revenue’s instant latter substantive ground as well. Rejected accordingly. No other ground or argument has been pressed.
This Revenue’s appeal is dismissed. Order pronounced in the open court on 8th January, 2026
6 | P a g e Sd/- Sd/- (S. RIFAUR RAHMAN) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 14th January, 2026. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi
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