IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.933/Ahd/2023 Assessment Year: 2017-18

O R D E R

This appeal is filed by the assessee against order dated 25.09.2023 passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2017-18.

2. The assessee has raised the following grounds of appeal :-

“1. The Learned Commissioner of Income tax (Appeals) has erred in facts and in law and confirmed the addition made by Assessing Officer Amt. of Rs.35,29,394/- u/s. 68 of I.T. Act as a unexplained cash credit for cash deposited in a bank during the demonetization period for the A.Y.2017-18.

2. The Assessment made is bad in law, invalid and illegal. It be so held now and the same be quashed.

3. Direction to charge interest u/s. 234AB&C without application of mind is unjustified. It be so held now.”

3. The assessee filed return of income for the Assessment Year (A.Y.) 2017- 18 on 28.09.2017 at a total income of Rs.7,55,990/-. The assessee is an individual and claimed to have earned income from business, rent and interest income. The return of income was processed under Section 143(1) of the Income Tax Act, 1961. The case was selected for scrutiny for the reason “cash deposited during demonetisation period”. Accordingly, notice under Section 143(2) of the Act was issued on 24.09.2018 which was served on the assessee electronically. Thereafter, notice under Section 142(1) was issued on 05.10.2019 and 17.06.2019 calling for details such as return of income, computation etc., cash book, Bank statement and source of cash deposit made by the assessee etc. in her bank account. During the assessment, the assessee furnished sale register, cash book with some bills of sales. The Assessing Officer observed that the assessee made cash deposit of Rs.35,19,500/- during the period of demonetisation in her bank account with Central Bank of India. The Assessing Officer observed that in various cases, addresses given by the assessee was not proper and, therefore, the assessee could not make any external enquiry. The cash sales shown by the assessee during the period of 10 days just before the demonetisation is not genuine but fabricated and after thought being colourable device used to show unaccounted cash as accounted one. Thus, the Assessing Officer held that the cash deposit of Rs.35,19,500/- during the demonetisation was out of the cash sale of Rs.35,29,394/- and the same is denied. Thus, the Assessing Officer made addition of Rs.35,29,394/- under Section 68 read with Section 115BBE of the Act treating the cash sales shown as unexplained cash credits within the meaning of Section 68 of the Act.

4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

5. The Ld. AR submitted that once the Assessing Officer has accepted the assessee’s sales, so cash generated through selling of gold ornaments and the same cash which was deposited in bank during the demonetisation period has been properly explained and, therefore, Section 68 of the Act will not be attracted in assessee’s case. The Ld. AR further submitted that the parties during the demonetisation period have purchased huge quantity of jewellery on cash which was duly recorded in the books of account of the assessee and also the same tallied with the quantity of stock. Thus, having a huge cash sale cannot tantamount to undisclosed income. The Ld. AR further submitted that no adverse finding regarding books of account or stocks or cash sales and vouchers were made by th