PARDEEP,ROHTAK vs. INCOME TAX OFFICER W-3, ROHTAK

PDF · subscribers
ITA 2249/DEL/2025Status: DisposedITAT Delhi03 June 2025AY 2017-183 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that while the lower authorities treated the entire Rs.16.24 lakhs as unexplained and liable under Section 115BBE, a lumpsum addition of Rs.1.24 lakhs would be just and proper, with the rider that this should not be treated as a precedent. This grants the assessee relief of Rs.15 lakhs on the disputed amount. Regarding the applicability of Section 115BBE, the Tribunal, following the Madras High Court's decision in S.M.I.L.E. Microfinance Ltd. Vs. ACIT, held that the provision comes into effect for transactions done on or after April 1, 2017. Therefore, the assessee is directed to be assessed under the normal provisions of the Act, implying that Section 115BBE is not applicable to the assessment year 2017-18 for these deposits. The ratio is that Section 115BBE is prospective from April 1, 2017, and for earlier periods, unexplained cash credits are to be assessed under normal provisions, with a reasonable addition if the explanation is not fully satisfactory.

What were the facts?

The assessee, Sh. Pradeep Kumar, is in appeal before the Income Tax Appellate Tribunal (ITAT) against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi. The assessment year in question is 2017-18. The dispute pertains to cash deposits amounting to Rs.16.24 lakhs made by the assessee during the demonetization period, which the lower authorities treated as unexplained and liable for assessment under Section 115BBE of the Income-tax Act, 1961. The assessee contended that these deposits represented re-deposits of prior cash withdrawals, supported by a cash-flow statement as of November 8, 2016, showing withdrawals of Rs.23.51 lakhs.

What were the issues?

1. Whether the ITAT has jurisdiction to decide the appeal, given the procedural history? (Mixed law and fact) 2. Whether the cash deposits of Rs.16.24 lakhs made during demonetization are unexplained and liable to be assessed under Section 115BBE of the Income-tax Act, 1961? (Mixed law and fact) Assessee's Contentions: - The cash deposits of Rs.16.24 lakhs represent re-deposits of previous cash withdrawals, as evidenced by the cash-flow statement as on November 8, 2016, which showed withdrawals of Rs.23.51 lakhs. - Relied on the principle that if cash withdrawals precede deposits, the deposits should be considered explained. - Relied on S.M.I.L.E. Microfinance Ltd. Vs. ACIT, W.P. (MD) No.2078 of 2020 & 1742 of 2020, dated 19.11.2024 (Madras) for the proposition that Section 115BBE is applicable only to transactions done on or after 01.04.2017. Revenue's Contentions: - The judgment records no specific contentions from the revenue regarding the explanation of cash deposits or the applicability of Section 115BBE, other than the fact that the lower authorities treated the deposits as unexplained.

Which sections of the Income-tax Act were involved?

Section 115BBE,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: “SMC” NEW DELHI

Before: SHRI SATBEER SINGH GODARA

For Appellant: Ms. Mansi Jain, CA, Ms. Sakshi Rustogi, Adv
Hearing: 03.06.2025Pronounced: 03.06.2025

This assessee’s appeal for assessment year 2017-18, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2024-25/1073921668, dated 03.03.2025 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.

2.

Coming to the sole substantive issue between the parties

herein, it emerges that both the lower authorities have treated the assessee’s cash deposits during demonetization amounting to Rs.16.24 lakhs, as unexplained and liable to be assessed under section 115BBE of the Act. As against this, the assessee has invited the tribunal’s attention to the cash-flow statement as on 8th November, 2016 indicating cash withdrawals of Rs.23.51 lakhs followed by re-deposit thereof to the tune of Rs.16.24 lakhs in question. That being the case, necessary inference which would arise is that although not specifically reconciled, the impugned cash represent assessee’s previous withdrawals.

3.

Be that as it may, it is deemed appropriate in this factual backdrop that a lumpsum addition of Rs.1.24 lakhs only would be just and proper with a rider that the same shall not be treated as a precedent. The assessee gets the relief of Rs.15 lakhs in other words.

4.

So far as assessee’s assessment under section 115BBE is 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.

5.

This assessee’s appeal is partly allowed.

Order pronounced in the open court on 3" June, 2025 Dated: 34 June, 2025. RK/-

More judgments on Section 115BBE

All 8,662 judgments and leading authorities on Section 115BBE →

Recent GST High Court judgments

Search GST case law →