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ITAT Rajkot Rejects Section 69A Addition on Suspicion of Inflated Jewellery Sales

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Summary

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  • The ITAT Rajkot has rejected a ₹2,65,59,500 addition under Section 69A against Aditya Ornaments, stating the cash deposits during demonetization were adequately explained as genuine sales.
  • The Tribunal found no defects in the audited books or supporting documents provided by the partnership firm, which included bank statements and VAT returns.
  • It emphasized that taxing recorded sales again as unexplained income would lead to impermissible double taxation.
  • This ruling reinforces the importance of proper documentation in tax assessments during periods of significant economic change.

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