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Facts
The Revenue appealed against orders of the CIT(A) concerning AY 2019-20, arising from proceedings under Section 143(3). The core issue was the treatment of cash deposits made by two related assessees, which the Revenue sought to tax as unexplained money under Section 69A read with Section 115BBE.
Held
The Tribunal found that while the assessees provided explanations for the cash deposits as business sales, they failed to reconcile or verify these with the Assessing Officer. The Revenue also could not definitively reject the assessees' explanations. Therefore, the Tribunal decided to make lump-sum additions.
Key Issues
Whether cash deposits made by related assessees, explained as business sales, are to be treated as unexplained money, and the applicability of Section 115BBE on such transactions.
Sections Cited
143(3), 69A, 115BBE, 145(3)
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Income Tax Appellate Tribunal, DELHI BENCH ‘A’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI NAVEEN CHANDRA
O R D E R PER SATBEER SINGH GODARA, J.M:
2019-20 arise against Commissioner of Income-tax (Appeals)-27, New Delhi’s as many orders [CIT(A), Delhi-27/10120/2019-20 & CIT(A), Delhi-27/10119/2019- 20], both dated 18.10.2022, respectively, in proceedings u/s 143(3) of the Income- tax Act, 1961, hereinafter referred to as the ‘Act’.
Heard both the parties at length.
A combined perusal of both case files reveals that the Revenue’s identical sole substantive grievance herein seeks to revive the assessment findings treating these twin assessee’s respective cash deposits of Rs. 3,55,38,000/- and Rs. 1,46,02,000/- as unexplained money u/s 69A read with Section 115BBE of the Act.
We are further informed that both these assessees are related parties wherein the former appears to be the firm and the latter individual assessee is its proprietor/ managing partner; as the case may be. The revenue vehemently argues in support of the foregoing identical addition that these twin assessees could not plead and prove the source of the impugned cash deposits by filing the corresponding supportive evidence and explanation in question.
Learned counsel, on the other hand, invites our attention to the CIT(A)’s lower appellate discussion accepting these assessees’ detailed explanation that the above impugned cash addition in fact represent their twin respective business sales in retail communication and related business activities. Our attention is further relevant details, inter alia, explaining source of the impugned cash deposits to the above identical regular business activities only. They further submit that the Assessing Officer(s) had nowhere specifically rejected either the corresponding books of accounts u/s 145(3) of the Act nor ever disturbed the relevant entries in the P&L a/c in question.
We have given our thoughtful consideration to the Revenue’s and the assessees’ foregoing submissions. We find no reason to accept either party’s arguments herein in entirety. This is for the precise reason that neither the assessees have been able to specifically get the impugned cash deposits reconciled/verified before the Assessing Officer nor the Revenue’s vehement contentions could brush aside the assessees’ corresponding detailed explanation(s).
Faced with this situation, we deem it appropriate, in the larger interest of justice, that lump sum additions of Rs. 10 lakhs and Rs. 5 lakhs appeal wise, respectively, shall be just and proper with a rider that the same shall not be treated as a precedent. Necessary computation shall follow.
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 shall be assessed under normal provisions qua the above additions of Rs. 10 lakhs and Rs. 5 lakhs (supra), respectively.
No other ground or argument has been raised before us.
These revenue’s appeals & 3016/Del/2022 are partly allowed. A copy of this common order be placed in respective case files.