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Facts
The assessee challenged an addition of Rs.61,44,000/- for alleged unexplained cash deposits in the bank account. The CIT(A) upheld the addition, finding that round figure cash deposits could not be matched with invoices or ledger accounts.
Held
The Tribunal held that the Ld. CIT(A) and Ld. AO had not properly linked the total sales, as evidenced by GST returns, with the cash deposits. Therefore, the matter was set aside for fresh assessment.
Key Issues
Whether the cash deposits in the bank account are unexplained and can be added to the income, and if the sales and cash deposits were sufficiently linked by the lower authorities.
Sections Cited
250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “B”NEW DELHI
Before: SHRIMAHAVIR SINGH, HON’BLE & SHRISANJAY AWASTHI
सुनवाईक�तारीख/ Date of hearing: 17.12.2025 17.12.2025 उ�ोषणाक�तारीख/Pronouncement on आदेश /O R D E R PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
This appeal arises from order dated 22.05.2025, passed u/s 250 of the Income Tax Act, 1961 (hereafter as “the Act”), by Ld. CIT(A)-NFAC, Delhi. In this case, the Ld. AO has added Rs.61,44,000/- as alleged unexplained cash deposit in the bank account. The aggrieved assessee carried this matter before the Ld. CIT(A) where the assessee could not succeed on the basis of finding given in para 5.2.4 at page 11 of the impugned order. Briefly, the Ld. CIT(A) has held that the cash deposits, which are in round figures, could not be matched with the invoices or the ledger accounts.
1.1 Further aggrieved, the assessee has approached the ITAT with a single ground which challenges the impugned addition on the ground that such cash deposits represent less than 5% of the total turnover.
Before us, the Ld. AR pointed out that the assessee was in the business of selling second hand laptops and other computer related accessories. It was the submission that some of the sales are in cash, which is deposited from time to time in the bank account as per convenience of the businessman. It was the submission that the assessee is regularly filing GST returns and the same are now produced before the ITAT in justification of the volume of sales. The Ld. AR requested that another chance may be given so that the assessee is able to justify that out of sales worth Rs.21 crores only a small percentage of less than 5% represented the cash deposits.
2.1 The Ld. DR relied on the orders of the authorities below.
We have carefully considered the rival submissions and have gone through the records before us. A perusal of the impugned order reveals that the Ld. CIT(A) and the Ld. AO have not really linked the total sales, as evidenced by the GST returns, and the cash deposits as a result of such sales. We are persuaded by the statement of the Ld. AR that these evidences would affect the case of the assessee qualitatively and thus, in the interests of accurate fact finding, we set aside the impugned order and remand the same back to the file of Ld. AO for fresh assessment.
Needless to say, the Ld. AO would give an opportunity of being heard.
In the result, appeal is allowed for statistical purposes.
Order pronounced in the open court on 17.12.2025