ITA No. 955/Del/2024

Parties Involved

Facts Summary

The assessee, SMS Trading Co., is a partnership firm engaged as a consignment sales agent for M/s Dharam Pal Satya Pal Ltd., selling Paan Masala and other tobacco products under the brand name Rajnigandha and others in retail. A survey under Section 133A of the Income Tax Act was conducted on 08.03.2017 at the business premises of the assessee. The assessee filed its return of income on 24.10.2017 declaring a total income of Rs.4,97,78,370/- for the Assessment Year 2017-18. During the scrutiny assessment, the Assessing Officer found that the assessee deposited cash of Rs.109.41 Cr. in its two bank accounts during the demonetization period. The Assessing Officer concluded that cash deposited to the extent of Rs.28,63,10,588/- was unexplained cash credit from an undisclosed source of income and made an addition to the returned income of the assessee. The assessee appealed this addition before the Commissioner of Income Tax (Appeals)–30, who deleted the addition, finding merit in the explanation offered by the assessee regarding the source of cash deposits.…

Legal Issues

• 1. Whether the addition of Rs.28,63,10,588/- made by the Assessing Officer under Section 68 of the Income Tax Act was justified.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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