Jewellery Sale Found Genuine: ITAT Deletes ₹1.45 Cr Demonetisation Cash Addition u/s 68 [Read Order]
The revenue objected to admission of additional evidence, the Tribunal noted that the CIT(A) had conducted enquiries, shared results with the Assessing Officer, and allowed him to respond.
![Jewellery Sale Found Genuine: ITAT Deletes ₹1.45 Cr Demonetisation Cash Addition u/s 68 [Read Order]](https://images.taxscan.in/h-upload/2026/01/30/2122592-jewellery-sale-found-genuine-taxscan.webp "Jewellery Sale Found Genuine: ITAT Deletes ₹1.45 Cr Demonetisation Cash Addition u/s 68 [Read Order]")
In a recent ruling, the Delhi bench of the Income Tax Appellate Tribunal held that cash deposits made during the demonetisation period represented genuine jewellery sales and could not be treated as unexplained income under section 68. The appeal was filed by the revenue before the tribunal challenging the order of the commissioner of income tax (appeals), which had deleted the...
In a recent ruling, the Delhi bench of the Income Tax Appellate Tribunal held that cash deposits made during the demonetisation period represented genuine jewellery sales and could not be treated as unexplained income under section 68.
The appeal was filed by the revenue before the tribunal challenging the order of the commissioner of income tax (appeals), which had deleted the income tax addition made during the assessment.
The appellant argued that the CIT(A) erred in admitting additional evidence and in deleting the additions despite high cash sales during demonetization.
The revenue point out that cash deposits of ₹1.45 crore made during the demonetisation period as unexplained income under Section 68 read with Section 115BBE, and further disallowed capital introduction of ₹50 lakh, holding that the declaration under the Pradhan Mantri Garib Kalyan Deposit Scheme (PMGKDS), 2016 was made at the fag end of the year and therefore the source of capital remained unexplained.
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CIT(A) noted that the assessee had followed the complete procedure under PMGKDS, paid taxes at the prescribed rate of 49.9%, and made the compulsory interest-free deposit as required. Since the declaration and payments were duly made, the addition of ₹50 lakh as unexplained capital was also deleted.
The tribunal observed that the assessee's cash deposits during the demonetisation period were properly recorded in the books of account and supported by the genuine jewellery purchase, which had been confirmed by creditors through enquiries under Section 133(6).
Also Regarding the addition of ₹50 lakh as unexplained capital, the Tribunal upheld the CIT(A)’s finding that the assessee had declared the amount under the Pradhan Mantri Garib Kalyan Deposit Scheme, 2016, paid the required taxes, and complied with the scheme’s procedure. Therefore, this addition was also deleted.
The Bench comprising Justice Satbeer Singh Godara (Judicial Member) and Shri S. Rifaur Rahman (Accountant Member) found no reason to interfere with the CIT(A)’s order and dismissed the Revenue’s appeal in its entirety.
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