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Facts
The Revenue's appeal concerned assessment year 2017-18, challenging an order related to unexplained cash deposits treated as income under Sections 68/69/69A and taxable under Section 115BBE. The AO had treated cash deposits of Rs. 81,00,000/- as unexplained.
Held
The Tribunal held that Section 115BBE applies only to transactions on or after April 1, 2017, as settled by the Madras High Court. Based on the low tax effect computed, the appeal was found to be hit by CBDT Circular No. 09 of 2024.
Key Issues
Whether Section 115BBE applies to transactions prior to April 1, 2017, and if the appeal is hit by CBDT circular on low tax effect.
Sections Cited
143(3), 68, 69, 69A, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘B’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI MANISH AGARWAL
O R D E R PER SATBEER SINGH GODARA, J.M: This Revenue’s appeal for assessment year 2017-18 arises against National Faceless Appeal Centre (NFAC) Delhi’s’ order dated 10.06.2024 [DIN & Order No. ITBA/NFAC/S/2024-25/1065518421(1)], in proceedings u/s 143(3) of the Income-tax Act, 1961, hereinafter referred to as the ‘Act’.
Heard both the parties. Case file perused.
It transpired at the outset that the Revenue’s sole substantive ground raised in the instant appeal seeks to revive the Assessing Officer’s action treating the ITO v. Eurospa Terrytowels P Ltd. A.Y. 2017-18 assessee’s cash deposits of Rs. 81,00,000/- as unexplained u/s 68/69/69A, as the case may be, and therefore liable to be taxed u/s 115BBE of the Act @ 60%.
That being the case we sought to verify the total tax effect involved in the Revenue’s instant appeal. Ld. Sr. DR, submits that the ld. AO has computed the same at Rs. 62,57,250/-. However, we find no merit in the above computation, once Hon’ble Madras High Court in the case of 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. We thus conclude that going by the consequential tax effect computation the Revenue’s instant appeal is hit by the CBDT Circular No. 09 of 2024 dated 17.09.2024 on account of low tax effect, as per the normal provisions. Revenue’s instant appeal is dismissed Order pronounced in open court on 04.08.2025.