IN THE INCOME-TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER &

SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MMBER आयकरअपीलसं./ITA No.672/SRT/2024 Assessment Year: (2017-18)

(Hybrid hearing)

Devngi Jewellers Pvt. Ltd. Vs. DCIT, 109 -110, Shreyas Diamond Centre, Circle – 1(1)(1), Mini Bazar, Varachha Road, Surat Surat - 395006 èथायीलेखासं./जीआइआरसं./PAN/GIR No: AABCD3227A (Appellant) (Respondent)

Appellant by Shri Sapnesh R. Sheth, CA Respondent by Shri Ravi Kant Gupta, CIT-DR Date of Hearing 31/07/2025 Date of Pronouncement 13/08/2025 आदेश /O R D E R PER BIJAYANANDA PRUSETH, AM:

This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (‘in short, the Act’) dated 27.04.2024 by the Commissioner of Income-tax (Appeal), National Faceless Appeal Centre (NFAC), Delhi [in short “the CIT(A)”] for the assessment year (AY) 2017-18.

2. The grounds of appeal raised by the assessee are as follows:

“1. On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A), NFAC has erred in confirming the action of assessing officer of passing order u/s.144 of the I.T. Act, 1961.

2. On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A), NFAC has erred in confirming the action of assessing officer in rejecting books of accounts by invoking provisions of section 145(3) of the I.T.

Act, 1961.

3. On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A), NFAC has erred in confirming the action of assessing officer in sustaining addition of Rs.11,34,29,166/- being the difference between cash on hand held on 09.11.2016 as per books and the opening cash balance as per books and further reduced by credits, whose identity has been provided as unexplained cash credits u/s.68 of the I.T. Act, 1961.

4. On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A) has erred in confirming the action of assessing officer in rejecting cash book and sales book and making the addition u/s.68 of the Act, of cash balance, which has been credited by the cash sales realization offered, as an income, without appreciating the fact that the sales realization only represents the price received by the appellant for sale of jewellery, for the acquisition of which the appellant has already incurred the cost, so, it is excess of realization over the cost incurred only forms part of profit and which has already been offered by the appellant.

5. On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A), NFAC has erred in confirming the action of assessing officer in rejecting cash book and sales book without appreciating the fact that appellant had already offered sales realization received in cash in books of accounts as an income and addition once again u/s.68 of the IT Act on the same amount would tantamount to double taxation of the same income.

6. On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A), NFAC has erred in confirming the action of assessing officer in invoking provisions of section 115BBE of the Act and in thereby taxing entire unexplained cash credits at 60 percentage and levying surcharge at 25 percentage which is not applicable on above amount.

7. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.

3. Facts of the case in brief are that the assessee e-filed its return of income for the AY 2017-18 on 30.10.2017, declaring therein total income at Rs.31,12,100/-. The case of the assessee was selected for complete scrutiny under CASS. The assessee had maintained five bank accounts during the year under consideration. There were cash deposits of Rs.11,17,71,000/- during the demonetization period in the three bank accounts. During the assessment proceedings, notices were issued by the Assessing Officer (in short, ‘AO’) u/s 142(1) and 133(6) of the Act