ORDER

This appeal is filed by the assessee against the order of learned Commissioner of Income-Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi dated 17.10.2022 for the assessment year 2017-18 in sustaining the addition of Rs.28,25,000 under Section 68 of the Income-Tax Act,1961 on account of cash deposits during the demonetization period.

2. Brief facts are that the assessee is an individual engaged in the business of retail trading of jewellery, filed the return of income on 31.03.2018 declaring income of Rs.11,44,200.

3. In the course of assessment proceedings, the Assessing Officer required the assessee to explain the source of cash deposits made into bank account during demonetization period. The assessee furnished the requisite details/documents on 16.10.2019 as called for by the Assessing Officer. The Assessing Officer on analyzing the cash sales during the assessment year 2016-17 and during the current assessment year i.e. 2017-18 was of the view that the cash sales made during the current assessment year were abnormally high while compared to the cash sales made during the assessment year 2016-17 for the corresponding period. Therefore, he required the assessee to show-cause as to why an amount of Rs.32,95,000 should not be added as income from undisclosed sources under Section 68 of the Act. In response to the show cause notice, the assessee filed his reply on 16.12.2019 stating that the cash deposits of Rs.32,50,000 were made out of sale proceeds and past savings. The contention of the assessee was not convinced the Assessing Officer. The Assessing Officer taking note of the fact that the assessee having cash in hand of Rs.3,23,741 out of which Rs.3,00,000 was considered to be the cash available with the assessee as on 19.11.2016. The Assessing Officer also accepted part of cash sales to the extent of Rs.1,70,000 and concluded that the cash deposits aggregating to Rs.28,25,000 remained unexplained and accordingly addition was made.

4. On appeal, learned Commissioner of Income-Tax (Appeals)

sustained the addition made by the Assessing Officer.

5. Learned counsel for the assessee submits that the assessee furnished all the information called for by the Assessing Officer. The assessee furnished cash book, details of sales, purchases, stock register, month-wise cash sales and cash deposits from 01.04.2015 to 31.03.2016 and also for the period from 01.04.2016 and also for the period 01.04.2016 to 31.03.2017. Learned counsel further submits that month-wise stock, giving opening stock, purchases and sales in each month along with details, statement of stock accounts were furnished. Learned counsel further submits that assessee has furnished copies of VAT returns for the period from 01.04.2016 to 31.03.2017. The learned counsel submits that the Assessing Officer did not point out any defects in the books of accounts furnished by the assessee. The books of accounts were accepted by both Assessing Officer as well as the learned Commissioner (Appeals). Learned counsel submits that the Assessing Officer has accepted the sales, purchases, accepted the stock tally wherein the assessee was holiday enough stock. Learned counsel submits that the assessee has explained the source for cash deposits as sale of jewellery, opening cash balance and also past savings. Learned counsel submits that having accepted part cash sales by the Assessing Officer, there is no justification in not accepting the remaining cash sales especially when there is no discrepancy pointed out in the books of account. The learned counsel strongly placed reliance on the decision of the Mumbai Bench of the Tribunal in the case of ACIT vs. M/s. Ram Lal Jewellers Pvt. Ltd. in ITA No.1600/Mum/2023 dated 26.07.2023. Referring to the decision, learned counsel submits that on identical facts, Mumbai Bench of the Tribunal deleted the addition made on account of cash deposits on the ground that if the parties during the period of demonetization has purchased huge