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Income Tax Appellate Tribunal, DELHI BENCH: ‘C’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI MANISH AGARWAL
Date of hearing 08.10.2025 Date of pronouncement 08.10.2025 ORDER
PER SATBEER SINGH GODARA, JM
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/250/2024-25/1068428563(1), dated 06.09.2024 involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.
This Revenue’s appeal raises the following substantive grounds: 1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs.3,08,85,591/- on account of unexplained cash deposit u/s 68 of the Act? 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs.3,08,85,591/- without appreciating the fact that the assessee has failed to prove the genuineness of the transactions? 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that all the credit entries in bank account stand explained on the basis of facts and documentary evidence submitted by assessee whereas the AO has observed otherwise and Ld. CIT(A) has not remanded back the issue to the AO under Rule 46 of the Income Tax Rules, 1962? 4. The appellant craves to add, alter or amend any/all of the grounds of appeal
before or during the course of the hearing of the appeal.
3. We have given our thoughtful consideration to the Revenue’s and the assessee’s respective submissions. Suffice to say, the sole substantive issue which arises for our apt adjudication is that of correctness of the learned CIT(A)’s findings reversing the Assessing Officer’s action treating the assessee’s cash deposits during demonetization of Rs.3,08,85,591/- in question as unexplained cash credits. There is no dispute between the parties that this assessee is engaged in wholesale and retail timber business; as the 2 | P a g e case may be, involving a significant portion of unorganized sector wherein its turnover in cash could not be altogether ruled out. This is indeed coupled with the fact that the assessee’s relevant books of account pertaining to financial year 2016-17 declaring the same as its regular business turnover had also not been rejected in assessment proceedings.
4. Be that as it may, keeping in mind the fact that the assessee had not successfully pleaded and proved sources of its impugned cash deposits during demonetization before the learned Assessing Officer; we are of the considered view that a lumpsum addition of Rs.10 lakhs herein would be just and proper to cover all of it’s shortcomings with a rider that the same shall not be treated as a precedent. Necessary computation shall follow as per law. We make it clear that we have partly upheld the learned CIT(A)’s finding deleting the impugned addition of Rs.3,08,85,591/- to the extent of Rs.2,98,85,591/- in other words.