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Facts
The Revenue appealed an order by the CIT(A)/NFAC which reversed the Assessing Officer's addition of Rs.1,12,48,800/- under Section 68 for unexplained cash credits in AY 2017-18. The Revenue argued that Section 115BBE applies to such credits.
Held
The Tribunal noted that the Madras High Court has settled the issue in a similar case, holding that Section 115BBE of the Act does not apply to transactions in AY 2017-18. The appeal was dismissed due to a tax effect below the prescribed limit.
Key Issues
Whether Section 115BBE of the Income Tax Act applies to unexplained cash credits in AY 2017-18, and if the tax effect meets the threshold for appeal.
Sections Cited
143(3), 68, 115BBE
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Income Tax Appellate Tribunal, DELHI BENCH ‘B’, NEW DELHI
Before: Sh. Satbeer Singh Godara & Sh. S. Rifaur Rahman
Asstt. Year : 2017-18 DCIT, Vs Dandona Finance Ltd., Circle-7(1), 1701-1702, Partap Street, New Delhi-110002 Chuna Mandi, Paharganj, New Delhi-110055 (APPELLANT) (RESPONDENT) PAN No. AAACD3430G Assessee by : Sh. Jagdish Ajmani, CA Revenue by : Sh. Rajesh Kumar Dhanesta, Sr. DR Date of Hearing: 26.06.2025 Date of Pronouncement: 26.06.2025 ORDER
Per Satbeer Singh Godara, Judicial Member:
This Revenue’s appeal for Assessment Year 2017-18, arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2023-254/1059410133(1) dated 05.01.2024, 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 emerges at the outset that the Revenue’s sole substantive grievance canvassed in the instant appeal seeks to revive the Assessing Officer’s action making section 68 unexplained cash credits addition of Rs.1,12,48,800/-; in the course of assessment dated 27.12.2019 and reversed in the Dandona Finance Ltd. CIT(A)/NFAC’s order under challenge. It is in this factual backdrop that we sought to know the net tax effect herein as to whether it is more than Rs.60 lacs in light of CBDT’s latest Circular No. 9/2024, dated 17.09.2024. The Revenue quotes section 115BBE of the Act that such unexplained cash credits are infact assessed at higher rate from A.Y. 2017-18 onwards.
We find no merit in the Revenue’s instant clarification as hon’ble Madras high court in 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 has already settled the issue that the above statutory provision section 115BBE of the Act does not apply to any transaction in A.Y. 2017-18. We thus, conclude that the Revenue’s instant appeal deserves to be dismissed since involving lower than the prescribed limit of tax effect of Rs.60 lacs in very terms.