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Facts
The assessee had cash deposits totaling Rs.37,00,000 during the demonetization period. The lower authorities treated these deposits as unexplained and assessed them under Section 115BBE. The assessee claimed these deposits were from a cash withdrawal of Rs.37,00,000 made earlier.
Held
The Tribunal noted that the cash withdrawal explained the source of the deposits, although not fully reconciled. It was deemed appropriate to make a lump sum addition of Rs.1,00,000. The Tribunal also ruled that Section 115BBE applies only to transactions after 01.04.2017.
Key Issues
Whether cash deposits during demonetization period can be assessed under Section 115BBE if the source is explained by prior withdrawals. Applicability of Section 115BBE to transactions before 01.04.2017.
Sections Cited
143(3), 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. Satbeer Singh Godara
Asstt. Year : 2017-18 Gurpreet Sandhu, Vs Income Tax Officer, C-763, New Friends Colony, Ward-1(5), New Delhi-110025 Gurgaon-122016 (APPELLANT) (RESPONDENT) PAN No. FBIPS7877H Assessee by: Sh. Sandeep Sapra, Adv. Revenue by : Sh. Manoj Kumar, Sr. DR Date of Hearing: 19.08.2025 Date of Pronouncement: 19.08.2025 ORDER This assessee’s appeal for Assessment Year 2017-18, arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2025-26/1077279041(1) dated 20.06.2025, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
It transpires during the course of hearing that both the lower authorities have treated the assessee’s cash deposits of Rs.37,00,000/- made on three instances during demonetization period in November and December 2016, as unexplained and liable to be assessed u/s 115BBE of the Act, in assessment order dated 06.12.2019 and upheld in the lower appellate discussion.
It is in this factual backdrop that the tribunal’s attention is invited to the assessee’s bank statement at page 14 wherein he is stated to have withdrawn an amount of Rs.37,00,000/- in cash on 03.03.2016 followed by re-deposits thereof in the foregoing three instances. It is thus clear that the assessee prima facie has explained source of his impugned cash deposits attributable to the above cash withdrawals only although not specifically reconciled or verified before both the learned lower authorities. It is thus deemed appropriate in the larger interest of justice that a lump sum addition of Rs.1,00,000/- only would be just and proper with a rider that the same shall not be treated as a precedent. The assessee gets relief of Rs.36,00,000/- in other words.
So far as assessee’s assessment under Section 115BBE is concerned, we quote S.M.I.L.E Microfinance Limited Vs. The ACIT CC-1 in W.P.(MD) No.2078 of 2020 & W.M.P. (MD) No. 1742 of 2020 held that the said provision applied for transactions done on or after 01.04.2017 only. The assessee is accordingly directed to be assessed under normal provisions only.