The ITAT has ruled that for cash jewellery sales below Rs. 2 lakh, a buyer's PAN is not required, emphasizing that suspicion cannot replace evidence. This ruling led to the deletion of a ₹13.68 crore addition by the Assessing Officer.
Buyer PAN Not Required for Cash Jewellery Sales Below Rs. 2L: ITAT
The Income Tax Appellate Tribunal (ITAT) held that a buyer's PAN is not mandatory for cash jewellery sales under ₹2 lakh and set aside a ₹13.68 crore addition made by the Assessing Officer (AO). The ruling clarified that genuine purchases cannot be deemed non-genuine solely based on suspicion.
The ITAT noted that the AO's findings indicated that the purchases were indeed genuine. It ruled that subsequent sales should not be questioned unless there is concrete evidence of non-genuineness, stating:
“When the purchases found to be genuine by AO, consequent sales cannot be made by the Assessee cannot be held to be not genuine only on the suspicion or presumption.”
This ruling reinforces the legal principle of evidence-based assessments in tax matters, establishing that mere suspicion cannot lead to adverse conclusions against taxpayers.
For practitioners, this decision signals the importance of evidentiary support when disputing claims related to large tax additions based on perceived irregularities in cash transactions.
Citations
- ITAT Order (2026) Taxscan 1450350
