The ITAT has ruled that a buyer's PAN is not necessary for cash jewellery sales below Rs. 2 Lakhs, quashing an addition of Rs. 13.68 crores based solely on suspicion.
ITAT Rules Buyer PAN Not Required for Cash Sales Below Rs. 2 Lakhs
The ITAT has ruled that a buyer’s Permanent Account Number (PAN) is not required for cash sales of jewellery that are below Rs. 2 Lakhs. This ruling came as a response to a case where an addition of Rs. 13.68 crores was levied based on mere suspicion of non-genuine transactions.
The tribunal clarified that the authenticity of purchases must be established before questioning the genuineness of subsequent sales. It was found that the purchases were confirmed as genuine by the Assessing Officer (AO), hence any inference drawn against the sales without substantial evidence did not hold up.
This decision reinforces the notion that mere suspicion or assumption cannot replace concrete evidence in tax assessments and supports the legal framework emphasizing that tax authorities must justify additions with undeniable proof.
This ruling is significant for tax professionals as it delineates the bounds of acceptable evidence in tax matters and underscores the importance of maintaining proper documentation during commercial transactions.
Citations
- ITAT Order (2026) 1450350
