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Facts
The assessee appealed an order that upheld an addition of Rs.21,53,074/- to their income under Section 68 read with Section 115BBE of the Income Tax Act. The addition was related to cash deposits made in the assessee's hands.
Held
The Tribunal held that the impugned cash deposits, despite not being fully reconciled, represented the assessee's business turnover. A lumpsum profit of Rs. 2 lakhs was deemed appropriate on estimation basis, and the addition under Section 115BBE was directed to be assessed under normal provisions.
Key Issues
Whether cash deposits represent unexplained income or business turnover, and the applicability of Section 115BBE to the assessment year.
Sections Cited
143(3), 68, 115BBE
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Income Tax Appellate Tribunal, DELHI BENCH: “SMC” NEW DELHI
Before: SHRI SATBEER SINGH GODARA
Assessment Year: 2016-17 Vs. Income Tax Officer, Sh. Jatinder Popli, C/o- Arora Chawla & Ward-29(1), Associates, B-107A, New Delhi Lower Ground Floor, Block, Kalkaji, New Delhi PAN: AHWPP1625R (Appellant) (Respondent) Assessee by Sh. Karan Chawla, CA Sh. Rahul Mandoliya, CA Department by Sh. Akhilesh Kumar Yadav, Sr. DR Date of hearing 05.06.2025 Date of pronouncement 05.06.2025 ORDER This assessee’s appeal for assessment year 2016-17, arises against the Commissioner of Income Tax (Appeals)/Addl./JCIT(A)- 9, Mumbai’s DIN and order no. ITBA/APL/S/250/2024- 25/1073064049(1), dated 10.02.2025 involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.
It is noticed during the course of hearing that the sole substantive grievance between the parties herein is that of correctness of section 68 read with section 115BBE cash deposit addition of Rs.21,53,074/- made in the assessee’s hands; in assessment order dated 28.12.2018 and upheld in the lower appellate discussion. This is what leaves the assessee aggrieved.
I have given my thoughtful consideration to the assessee’s and the Revenue’s vehement submission reiterating their respective stands. It is made clear that there is no dispute about the fact of assessee having carried out retail garment business as a franchise of Gini and Jony Freedom Fashions Ltd. and allied activities. That being the case and de-hors his substantive explanation along with evidence, the only inference which would arise in the given facts is that the impugned cash deposits; although not specifically reconciled, represent his business turnover. It is thus deemed appropriate in the larger interest of justice that a lumpsum profit element of Rs.2 lakhs only on estimation basis would be just and proper with a rider that the same shall not be treated as a precedent. The assessee gets relief of Rs.19,53,074/- in other words. Necessary computation shall follow as per law.
So far as assessee’s assessment under section 115BBE is concerned, I quote S.M.I.L.E. Microfinance Ltd. Vs. ACIT, W.P. (MD) No.2078 of 2020 & 1742 of 2020, dated 19.11.2024 (Madras) that the impugned statutory provision would come into effect on the transaction done on or after 01.04.2017 only. The assessee is accordingly directed to be assessed under the normal provision as per law.