ITA 1862/DEL/2026

Parties Involved

Facts Summary

The appeal in ITA No.1862/Del/2026 for AY 2017-18, arises out of the order of the ld National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] dated 23.12.2025 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 28.12.2019 by the Assessing Officer, ITO, Ward-58(8), Delhi (hereinafter referred to as ‘ld. AO’). The only effective issue to be decided in this appeal is challenging the addition made on account of cash deposits made during the demonetization period. The interconnected issue involved therein is with regard to addition made on account of alleged undisclosed sales. The Assessee is a proprietor of M/s. SPC Overseas engaged in the wholesale trading of spices namely Mirch and Dhania. The return of income for the assessment year 2017-18 was filed by the Assessee on 27-02-2018 declaring total income of Rs. 11,90,940. The Learned AO noted that Assessee had made cash deposits of Rs. 87,17,500 in Axis Bank account and Rs. 2,40,000 in HDFC Bank account during the demonetization period from 9-11-2016 to 31-12-2016 aggregating to Rs. 89,57,500. The Learned AO sought for explanation of sources for the said cash deposits. The Learned AO ultimately after giving nominal benefit of cash balance, proceeded to treat the sum of Rs. 88,97,500 as unexplained cash credit taxable under section 68 read with section 115BBE of the Act. Further, the Learned AO on comparison of turnover…

Legal Issues

• 1. Challenging the addition made on account of cash deposits made during the demonetization period.
• 2. Addition made on account of alleged undisclosed sales.

Judgment Outcome

Decided in favour of Assessee.

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