Cash sales on the day of demonetisation, deposited two days later. Unexplained credit?
Not where the books were never rejected. Sales already recorded and offered as income cannot be taxed again as unexplained cash credits — that is double taxation. A Rs 4.36 crore addition was deleted in full.
Decided by the ITAT (ITAT Jaipur Bench) on 2025-11-12, reported as ITA No. 1121/JPR/2025. It bears on section 68 of the Income Tax Act 1961, in Cash Credits & Unexplained Money matters.
Demonetisation-era additions are still moving through appeals nine years on. The decisive question in almost all of them is narrow: did the officer reject the books under s.145(3)? If not, the sales recorded in those books are already taxed.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee ran a jewellery retail business at Jodhpur. On 8 November 2016, the day demonetisation was announced, the outlet recorded cash sales of Rs 4,35,91,454 supported by 347 invoices, each below Rs 2 lakh. The cash was deposited with the bank on 10 and 11 November 2016 after banks reopened. The Assessing Officer added the entire amount as unexplained cash credit.
As reported: the Tribunal deleted the entire addition of Rs 4,35,91,454, on the footing that the cash sales recorded on 8 November 2016 were genuine because the books of account had never been rejected, and that sales already recorded and offered as income could not be taxed again as unexplained cash credits under s.68. None of that has been checked against the order, which could not be found in a full-text subscription research database. No paragraph has been read, and whether the Tribunal deleted the addition outright or restored any part of it to the Assessing Officer is not established.
No paragraph of the order has been read and there is no sourced account of the Tribunal's route. What was previously set out here — that the day-to-day stock records, cash book and sales register were accepted with no defect recorded, that accepted books preclude treating recorded cash sales as unexplained credits because that would tax the same income twice, and that the Bench followed earlier Jaipur decisions on demonetisation-day cash sales — is a reconstruction from a single secondary report and cannot be traced to the order. The line of reasoning itself is real and can be run on decisions that have been located: Mahesh Kumar Gupta v. ACIT [2023] 151 taxmann.com 339 (Jaipur - Trib.), 23 March 2023, decided in favour of the assessee, and ACIT v. Chandra Surana [2023] 149 taxmann.com 379 (Jaipur - Trib.), which holds that s.68 cannot be invoked in respect of cash sales already recorded in books accepted by the department. Note the counter-example: in ACIT v. Manav Motors [2023] 157 taxmann.com 814 (Raipur - Trib.), 30 November 2023, on materially similar demonetisation-period deposits, the Tribunal set aside the Commissioner (Appeals) and restored the issue to the Assessing Officer because the explanation was not corroborated, distinguishing the cash-sales line at para 13. These cases turn on whether the books were in fact accepted and the sales in fact substantiated.
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Handle my notice → Ask a CA on WhatsAppNot where the books were never rejected. Sales already recorded and offered as income cannot be taxed again as unexplained cash credits — that is double taxation. A Rs 4.36 crore addition was deleted in full. This was decided by the ITAT (ITAT Jaipur Bench) and bears on section 68 of the Income Tax Act 1961. It is reported as ITA No. 1121/JPR/2025. Demonetisation-era additions are still moving through appeals nine years on. The decisive question in almost all of them is narrow: did the officer reject the books under s.145(3)? If not, the sales recorded in those books are already taxed. If it applies to you, the first step is this: Check whether the assessment order actually rejects the books under s.145(3) — many do not, and simply add.
The assessee ran a jewellery retail business at Jodhpur. On 8 November 2016, the day demonetisation was announced, the outlet recorded cash sales of Rs 4,35,91,454 supported by 347 invoices, each below Rs 2 lakh. The cash was deposited with the bank on 10 and 11 November 2016 after banks reopened. The Assessing Officer added the entire amount as unexplained cash credit. The matter was decided on 2025-11-12 by the ITAT (ITAT Jaipur Bench). On those facts the ITAT held as follows. As reported: the Tribunal deleted the entire addition of Rs 4,35,91,454, on the footing that the cash sales recorded on 8 November 2016 were genuine because the books of account had never been rejected, and that sales already recorded and offered as income could not be taxed again as unexplained cash credits under s.68. None of that has been checked against the order, which could not be found in a full-text subscription research database. No paragraph has been read, and whether the Tribunal deleted the addition outright or restored any part of it to the Assessing Officer is not established.
No paragraph of the order has been read and there is no sourced account of the Tribunal's route. What was previously set out here — that the day-to-day stock records, cash book and sales register were accepted with no defect recorded, that accepted books preclude treating recorded cash sales as unexplained credits because that would tax the same income twice, and that the Bench followed earlier Jaipur decisions on demonetisation-day cash sales — is a reconstruction from a single secondary report and cannot be traced to the order. The line of reasoning itself is real and can be run on decisions that have been located: Mahesh Kumar Gupta v. ACIT [2023] 151 taxmann.com 339 (Jaipur - Trib.), 23 March 2023, decided in favour of the assessee, and ACIT v. Chandra Surana [2023] 149 taxmann.com 379 (Jaipur - Trib.), which holds that s.68 cannot be invoked in respect of cash sales already recorded in books accepted by the department. Note the counter-example: in ACIT v. Manav Motors [2023] 157 taxmann.com 814 (Raipur - Trib.), 30 November 2023, on materially similar demonetisation-period deposits, the Tribunal set aside the Commissioner (Appeals) and restored the issue to the Assessing Officer because the explanation was not corroborated, distinguishing the cash-sales line at para 13. These cases turn on whether the books were in fact accepted and the sales in fact substantiated.
It was decided by the ITAT on 2025-11-12 and is reported as ITA No. 1121/JPR/2025. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 68, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. As reported: the Tribunal deleted the entire addition of Rs 4,35,91,454, on the footing that the cash sales recorded on 8 November 2016 were genuine because the books of account had never been rejected, and that sales already recorded and offered as income could not be taxed again as unexplained cash credits under s.68. None of that has been checked against the order, which could not be found in a full-text subscription research database. No paragraph has been read, and whether the Tribunal deleted the addition outright or restored any part of it to the Assessing Officer is not established. It arises in Cash Credits & Unexplained Money matters, on section 68 of the Income Tax Act 1961, and was decided by ITAT Jaipur Bench. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Produce the stock movement for the same period; sales without a matching fall in stock will be tested hard. Keep the invoice-level record, not just the total — the invoice count and values did the work here.
Validity check could not be completed. Downgraded from 'good law'. The order could not be found in a full-text subscription research database: searches on the party name, on the appeal number ITA No. 1121/JPR/2025, and on the party name with the subject matter all failed to return it. No later decision applying, following or affirming it was traced, and absence of contrary authority is not good law. The claim previously carried here that the Tribunal followed Morrisons Jewellers Ltd and Mahesh Kumar Gupta cannot be checked, because no paragraph of the order has been read; Mahesh Kumar Gupta v. ACIT [2023] 151 taxmann.com 339 (Jaipur - Trib.), 23 March 2023, does exist and was decided in favour of the assessee, but that establishes the precedent, not that this order followed it. The statement previously made here about the successor provision in the Income-tax Act 2025 was not verified in this read and has been removed rather than repeated. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The order could not be found in a full-text subscription research database. Three searches were run: the party name, which returns five unrelated records; the appeal number ITA No. 1121/JPR/2025, which returns none; and the party name with the subject matter, which returns seven demonetisation decisions, none of them this one. The cause title, the bench, the date of 12 November 2025, the assessment year and every figure rest on a single news report on one domain, and no paragraph of the order has been read. The sentence previously quoted here was a headline's rendering of the outcome, not language of any order, and has been removed rather than re-attributed, so the entry now carries no quotation. Treat the citation as unconfirmed and the entry as a secondary report rather than a reasoned holding. A Tribunal decision, and demonetisation cases turn heavily on their own facts. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
As reported: the Tribunal deleted the entire addition of Rs 4,35,91,454, on the footing that the cash sales recorded on 8 November 2016 were genuine because the books of account had never been rejected, and that sales already recorded and offered as income could not be taxed again as unexplained cash credits under s.68. None of that has been checked against the order, which could not be found in a full-text subscription research database. No paragraph has been read, and whether the Tribunal deleted the addition outright or restored any part of it to the Assessing Officer is not established.
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