IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’: NEW DELHI [

BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.3893/Del/2023 (ASSESSMENT YEAR 2017-18)

Dhananjay Prop. of M/s Income Tax Officer, Innovative Business Ward-51(2), Solution, 2097/A-1, Vs. Delhi.

Gali No.15, Near Govt.

School, Prem Nagar, Patel Nagar, New Delhi-110008.

PAN:AMBPD2549L (Appellant) (Respondent)

Assessee by Shri Mayank Sharma, Adv. Department by Ms. Suman Malik, CIT-DR Date of Hearing 02/06/2025 Date of Pronouncement 02/06/2025

O R D E R

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PER MANISH AGARWAL, AM:

This appeal is filed by the assessee against the order of the ld.

Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A) in short], dated 07.11.2023 in Appeal No. CIT(A), Delhi-17/11006/2019-20 passed u/s 250 of the Income Tax Act, 1961 (the Act, in short) for Assessment Year 2017-18.

2. Brief facts of the case are that the assessee is an individual and Prop. of M/s Innovative Business Solutions engaged in the business of providing business solutions. The return of income in the year under appeal was filed on 25.12.2012 declaring total income at Rs.4,85,040/-. The assessee deposited large cash into bank during the demonization period in Specified Band Notes (SBN), therefore, the case of the assessee was taken up for scrutiny and after considering the submissions made by assessee, an addition of Rs.42,85,000/- was made on account of cash deposit in SBN during demonetization by holding the same as unexplained u/s 68 of the Act. Further addition of Rs.25,50,950/- was made by estimating GP @ 10% on the total turnover of Rs. 2,55,09,514/-.

3. Against this order, assessee preferred the appeal before Ld. CIT(A) who dismissed the appeal of the assessee, therefore, the assessee is in appeal before the Tribunal.

4. In grounds of appeal Nos. A to G, assessee challenged the addition of Rs.42,85,000/- made u/s 68 of the Act towards the cash deposited in bank in SBN during the period of demonetization.

5. Before us, Ld. AR of the assessee submits that assessee had declared turnover of Rs.2,55,09,514/- which includes the amount realised from cash sale and available with the assessee in the cash book as on 08.11.2016, when the demonetization was announced. Out of the said cash balance, a sum of Rs. 42,85,000/- was deposited in the bank account during demonetization period in SBN by the assessee. Ld. AR submits that the turnover of the assessee had increased multifold as compared to immediately preceding year and cash available was the realization of sales, therefore, the deposit in SBN should not be treated as unexplained money u/s 68 of the Act.

He prayed for deletion of the addition made on this account.

6. On the other hand, Ld. CIT-DR supports the order of the lower authorities and submits that assessee had failed to substantiate the source of cash deposited during the period of demonetization. Accordingly, he prayed for confirmation to the order of lower authorities.

7. Heard both the parties and perused the materials available on record. Admittedly the assessee had claimed that the immediate source of cash was the sales made during the year. The AO though had rejected the trading results declared by the assessee, however, had not doubted the sales declared by the assessee and GP is estimated.

8. The realization of cash sales is duly recorded in the cash book maintained on day to day basis. Assessee has deposited SBN during the demonetization on various dates out of the cash available as on date with assessee as on the closing hours of 08.11.2016 i.e. the date when the demonetization was announced by the hon’ble prime minister and was the last day upto which the SBN could be accepted as valid currency. The AO is required to consider the records of the assessee such as bank statement, monthly sales summary, possibility of back-dating of cash sales or fictitious sales etc. before making any allegation about the genuineness of the cas