IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’: NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.1658/Del/2024 (ASSESSMENT YEAR 2017-18)

Asst. CIT, Sudha Agarwal, Circle-2(2)(1), III/A-5, Nehru Nagar, Vs. Ghaziabad.

Ghaziabad-201002, Uttar Pradesh.

PAN-ABMPA7690K (Appellant) (Respondent)

Assessee by Shri Rajeshwar Painly, Adv.

Shri Mohit Giri, Adv.

Department by Shri Sahil Kumar Bansal, Sr. DR Date of Hearing 12/02/2025 Date of Pronouncement 05/03/2025

O R D E R

PER MANISH AGARWAL, AM:

This is appeal filed by the assessee against the order passed u/s

250 of the Income Tax Act, 1961 (the Act, in short) by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 13/02/2024 in Appeal No. CIT(A), Ghaziabad/10957/2019-20 for Assessment Year 2017-18.

2. Brief facts of the case are that assessee is an individual and is proprietor of M/s Shreeji Diamond World and is engaged in the business of trading of Diamond jewellery on retail basis since past long. The return of income for the year under appeal was filed on 19/06/2017 declaring total income at Rs. 28,35,570/-. The case was selected under CASS and the assessment was completed u/s 143(3) of the Act assessing the income of the assessee at Rs. 2,54,66,307/- by making addition of Rs. 1,27,15,000/- u/s 68 of the Act on account of cash deposit during demonetization as undisclosed income and further made addition of Rs. 99,15,777/- on account of under valuation of stock.

3. Against such order assessee preferred an appeal before the ld. CIT(A) who vide order dt. 18/12/2019 decided the appeal of the assessee wherein based on the material available on the record has partly allowed the appeal of the assessee without providing fair and reasonable opportunity of being heard to the assessee. Ld. CIT(A) has reduced the addition made on account of cash deposited in SBN during the demonetization from Rs. 1,27,15,000/- to Rs. 85,00,000/- being 2/3 of such cash deposited and further reduced the amount of under valuation of stock from Rs. 99,15,777/- to Rs. 23,99,550/-. Aggrieved by the said order, assessee is in appeal before the Tribunal.

4. The assessee has taken following grounds of appeal:-

“1. That the impugned Appeal Order is bad in law, illegal, and in violation of rudimentary principal of contemporary jurisprudence.

2. The Hon'ble Commissioner of Income Tax (Appeal), National Faceless Appeal Centre (NFAC), Delhi erred in law and fact in upheld the addition of Rs. 85,00,000/- on account of unexplained credit under section 68 of the Income Tax Act. 1961.

3. The Hon'ble Commissioner of Income Tax (Appeal), National Faceless Appeal Centre (NFAC), Delhi erred in law and fact in upheld the addition of Rs. 23,99,550/- on account of under valuation of stock.

4. That the Appellant craves leave to add/alter any/all grounds of appeal before at the time of hearing of the appeal.”

5. Before us, the Ld. AR of the assessee submitted that during the year under appeal assessee has made trading of diamond jewellery on retail basis. The assessee has maintained regular books of account which were duly audited and no defect whatsoever was pointed out by the auditor. During the course of hearing before the AO, assessee has filed every details as asked from time to time and the AO has not pointed out any defect in the details so submitted nor has doubted the genuineness of books of account produced before him. The trading results declared by the assessee were accepted which are progressive in nature. Ld. AR further submitted that when books of accounts have been accepted and the sales have not been doubted, the cash deposit out of the said sales could not be held as unexplained. Ld. AR argued that when sales have already been offered for tax, the cash generated out of such sales could not be doubted and if the such cash deposits out of such cash sales is taxed it would tantamount to double taxation. The Ld. AR further submitted t