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.2922/Del/2023 (ASSESSMENT YEAR 2017-18)

Income Tax Officer, Suresh Chand, Ward-2, Narnaul. M/s Suresh Chand Vs.

Subhash Chand Mandi Ateli, Mohindergarh-123021, Haryana.

PAN-ABTPC3030A (Appellant) (Respondent)

Assessee by Shri Gautam Jain, Adv.

Shri Ankit Kumar, Adv. &

Shri Parth Singhal, Adv.

Department by Sh. Sahil Kumar Bansal, Sr. DR Date of Hearing 13/02/2025 Date of Pronouncement 07/03/2025

O R D E R

PER MANISH AGARWAL, AM:

This appeal is 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 25/08/2023 in Appeal No. CIT(A), Rohtak/10871/2019-20 for Assessment Year 2017-18.

2. Brief facts of the case are that assessee is an individual and is proprietor of M/s Suresh Chand Subhash Chand and is engaged in the business of trading of agriculture produce like Bajra, Gwar, Sarson, Khal etc. in the Krishi Upaj Mandi, Ateli. The return of income for the year under appeal was filed on 14/09/2017 declaring total income at Rs. 3,55,820/-. A survey action u/s 133A was carried out at the business premises of the appellant on 27/02/2017. The AO observed that during the course of survey statement of the assessee were recorded and some incriminating material was also impounded. Thereafter the case was selected under compulsory scrutiny and assessment was completed u/s 143(3) of the Act assessing the income of the assessee at Rs. 77,04,417/- by making addition of Rs. 73,48,597/- u/s 68 of the Act by holding the part of the cash deposit during demonetization as undisclosed income.

3. Against such order assessee preferred an appeal before the ld. CIT(A) who vide order dt. 25/08/2023 has summarily dismissed the appeal of the assessee by relying upon the observations made by the AO. Aggrieved by the said order, assessee is in appeal before the Tribunal.

4. The assessee has taken following grounds of appeal:- “1 That the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred both in law and on facts in upholding an addition made of Rs.73,48,597/- representing alleged unexplained cash deposits in the bank account of the appellant during the period of demonetization and brought to tax under section 68 of the Act read with section 115BBE of the Act.

1.1 That, the learned Commissioner of Income Tax (Appeals) has also failed to appreciate that the learned Assessing Officer having accepted the cash sales and taxed income thereon could not by any stretch of imagination either legally or logically hold that cash deposited is unexplained and taxable as income of the assessee u/s 68 of the Act. 1.2 That the learned Commissioner of Income Tax (Appeals) has further failed to appreciate that once the sales are duly recorded in the books of accounts and have been made out of stock available in the books of accounts then both logically and legally, such sales could not be separately assessed to tax as bogus sales and unexplained cash credit u/s 68 of the Act.

1.3 That the learned Commissioner of Income Tax (Appeals) has also erred both in law and on facts in upholding the addition by failing to appreciate that once books of accounts are correct and complete and therefore, the sales as recorded in the books of accounts out of stock available with the appellant could to be regarded as cash sales merely on statements without disregarding the factual matrix/evidence tendered by the appellant

1.4 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that once the purchases declared in the books of accounts were duly accepted then no subjective assumption and presumption could be made a basis to subjective assumption and presumption could be made a basis to assume, allege and conclude that sales made out of