GIRISH GUPTA HUF,2062, GALI MAHAVIR TELIWARA vs. INCOME TAX OFFICER, CIVIC CENTRE

This assessee’s appeal 2017-18 arises against CIT(A)/ NFAC, Delhi’s order dated 30.07.2024 (DIN & Order No. ITBA/NFAC/S/250/2024-25/1067132866(1), in proceedings u/s 143(3) of the Income-tax Act, 1961, hereinafter referred to as the ‘Act’.

It emerges during the course of hearing that both the learned lower authorities have treated the assessee’s cash deposits of Rs. 14,00,000/- as unexplained u/s 69A read with Section 115BBE of the Act; in assessment order dated 10.12.2019 and upheld in lower appellate discussion. assessee’s income all along has been assessed in preceding assessment years and it is stated to be engaged in small type finance activities. This clinching fact has remained unrebutted from the Revenue’s side in principle. It is therefore clear in this background that necessary influence which would arise in the given facts is that impugned cash prima facie represents the assessee’s business receipts in finance activities, liable to be assessed only qua the profit element embedded therein. I, accordingly, direct the learned assessing authority to assess the impugned cash deposits @ 10% coming to 1.4 lakh only. Ordered accordingly.

So far as the assessees’ assessment u/s 115BBE is concerned, the Revenue could hardly dispute that hon’ble Madras high court in SMILE Microfinance Ltd. v. ACIT in WP(MD) No. 2078 of 2020 & 1742 of 2020 dated 19.11.2024 (Mad.) has already settled the issue that Section 115BBE applies on transactions on or after 01.04.2017 only. Learned Assessing Officer shall ensure that the assessee shall be assessed under normal provisions qua the above addition of Rs. 1.4 lakh.