JCIT v. Aries Agro Ltd.

Case snapshot

Sections / provisions: 133(6); 68

Questions before the Court / Tribunal

• Demonetisation cash deposits arising from recorded sales: The reported order upholds deletion of a section 68 addition where customer details, responses to notices, VAT-accepted sales and books were said to support the cash-sale explanation.

Material facts and background

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH MUMBAI BEFORE HON’BLE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER & SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER

M/s. Aries Agro Ltd., Plot No. 24, Aries House, Deonar, Govandi (E), Mumbai – 400043 PAN/GIR No. AAACA5035G (Applicant) (Respondent)

PER SANDEEP GOSAIN, JM: The present appeal has been filed by the revenue challenging the impugned order 26.11.2024 passed u/s 250 of the Income Tax Act, 1961 (‘the Act’), by the National Faceless Appeal Centre, Delhi (NFAC) for the assessment year 2017-18. 2.

AO, submitted that assessee had made substantial cash deposits in ‘SBN’ during the demonetization period and nature of these credits falls under ‘unexplained cash credit’ within the meaning of Sec. 68 of the Act and without appreciating the said fact Ld. CIT(A) has wrongly deleted the additions made by the Ld.AO. It was further submitted that assessee could not establish the genuineness and creditworthiness of cash deposits made during the year under consideration and even the source of these credits remained unexplained. It was further submitted by Ld. DR that Ld. CIT(A) has not appreciated the fact that cash receipts from parties have been entered in the books of assessee from 01.11.2016 to 08.11.2016 i.e just before demonetization period. It was also argued and stressed by Ld. DR that all the parties from where the source of cash deposit is being claimed by the assessee have not made any cash payments in the earlier years and therefore while relying upon the decision of Hon’ble Supreme Court in the case of CIT vs. Durga Prasad More (1971) 82 ITR 540 (SC) and Sumati Dayal vs. CIT (1995) 214 ITR 801 (SC), it was submitted that the courts have laid down a test to analyze the...

perused the material placed on record, judgments cited by respective parties and also the orders passed by the revenue authorities. From the records we noticed that it is an undisputed fact that the assessee company is a listed company in which public is substantially interest and engaged in the business of manufacturing of mineral additives for the agriculture use, micronutrients and other nutritional products for plants and animals. Assessee has 6 factories, 28 sale depots and more than 357 dealers across the country.

Appellant / assessee submissions

The judgment copy does not separately set out this component in a distinct section; refer to the full order and the reasoning section below.

Revenue / respondent submissions

In this regard Ld. DR while relying upon the orders of

AO, submitted that assessee had made substantial cash deposits in ‘SBN’ during the demonetization period and nature of these credits falls under ‘unexplained cash credit’ within the meaning of Sec. 68 of the Act and without appreciating the said fact Ld. CIT(A) has wrongly deleted the additions made by the Ld.AO. It was further submitted that assessee could not establish the genuineness and creditworthiness of cash deposits made during the year under consideration and even the source of these credits remained unexplained. It was further submitted by Ld. DR that Ld. CIT(A) has not appreciated the fact that cash receipts from parties have been entered in the books of assessee from 01.11.2016 to 08.11.2016 i.e just before demonetization period. It was also argued and stressed by Ld. DR that all the parties from where the source of cash deposit is being claimed by the assessee have not made any cash payments in the earlier years and therefore while relying upon the decision of Hon’ble Supreme Court in the case of CIT vs. Durga Prasad More (1971) 82 ITR 540 (SC) and Sumati Dayal vs. CIT (1995) 214 ITR 801 (SC), it was submitted that the courts have laid down a test to analyze the...

Court / Tribunal analysis and reasoning

Act was that the cash receipts were entered in the books of assessee w.e.f 01.11.2015 to 08.11.2016 and the said parties had earlier not made any cash payments and the transactions Therefore,

evidence with the AO to substantiate that cash deposit is not out of opening cash balance therefore the entire addition made by AO was based upon conjectures and

therefore we see no reasons to interfere in to or to deviate from the lawful findings so recorded by the Ld. CIT(A). Therefore, the grounds of appeal raised by the revenue stands dismissed.

Operative decision and relief

evidences or documents have been placed on record by the revenue to controvert or rebut the findings of Ld. CIT(A),

therefore we see no reasons to interfere in to or to deviate from the lawful findings so recorded by the Ld. CIT(A). Therefore, the grounds of appeal raised by the revenue stands dismissed.

15. In the result the appeal filed by the revenue stands dismissed. Order pronounced in the open court on 30.04.2025.

Mumbai, Dated 30/04/2025 KRK, PS आदे श की ितिलिप अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant

थ / The Respondent. सं बंिधत आयकर आयु  / The CIT(A) आयकर आयु (अपील) / Concerned CIT िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, मुबई / DR, ITAT, Mumbai

Authorities and precedents appearing in the judgment

• CIT vs. Durga Prasad More (1971) 82 ITR
• SC) and Sumati Dayal vs. CIT (1995) 214 ITR 801
• In ITO v. Sahana Jewellery Exports (P) Ltd
• Lalchand Bhagat Ambica Ram v. CIT (1959) 37 ITR 288
• Lakshmi Rice Mills v. CIT (1974) 97 ITR 258
• CIT v. Agson Global (P) Ltd (2022) 325 CTR 1
• Khale Khan Mohammad Hanif v. CIT (1963) 50 ITR 1
• Enterprises v. ITO (ITA No. 1220/Del/2011) (Del) (Trib)
• Kanpur Steel Co. Ltd. v. CIT
• Lalchand Bhagat Ambica Ram v. CIT
• Even the decision relied upon by the AO in CIT vs. Durga Prasad More (1971) 82 ITR 540 (SC) and Sumati
• Dayal vs. CIT (1995) 214 ITR 801 (SC) are not applicable

This list is machine-assisted from the judgment text and is not a substitute for checking the full citation chain in the PDF.

Ratio and legal principle

The decision turns on Demonetisation cash deposits arising from recorded sales. The operative result is classified as Dismissed. Read the rule only with the statutory version, factual findings and precedent chain recorded in the full judgment.

Why this judgment matters

The case is relevant to taxpayers, advisers and litigators dealing with Demonetisation cash deposits arising from recorded sales. Its practical value lies in the interaction between the statutory text, the evidentiary record and the procedural route followed in this case.

Practitioner action points

• Build a transaction-level evidence file: confirmations, bank trail, invoices, ledger, tax/GST records and counter-party material rather than relying on a generic explanation.
• Where the addition depends on a third-party statement or investigation report, record the request for the relied material and cross-examination at the earliest stage.
• For litigation, attach the full judgment/order to the working paper and cite the paragraph/page supporting the proposition rather than relying on a headnote alone.

Full judgment and source trail

Read / download the clean local judgment copy

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