RAM SARAN DASS & SONS,. vs. ITO WARD-35(5), DELHI , .

Heard both the parties at length. Case file perused.

This assessee’s appeal raises the following substantive grounds:

That the ld. CIT(A), NFAC has grossly erred in law as well on facts in sustaining the addition of Rs.2,31,747/- against the bad debt written off.

That the ld. CIT(A), NFAC has grossly erred in law as well as on facts sustaining the addition of Rs.61,526/- against the disallowance of expenditure incurred on account of sale tax.

That the ld. CIT(A), NFAC has grossly erred in law as well as on facts in sustaining the addition of Rs.7,20,000/- against the disallowance of expenditure incurred on account of partners salary.

That the order passed by ld. CIT(A), NFAC is bad in law and required to be quashed as no reasonable and sufficient opportunity of being heard was provided and thereby violating the Principles of natural justice.”

Learned counsel does not wish to press the assessee’s fourth substantive ground involving sales tax issue keeping in mind smallness of the amount involved. Rejected in very terms.

Now comes the first and foremost issue between the parties wherein both the learned lower authorities have added the assessee’s cash deposits during demonetization of Rs.26,50,000/- u/s 69A r.w.s. 115BBE of the Act. The Revenue could hardly dispute that the assessee all along been carried out his regular business activity in the preceding as well as succeeding assessment year involving cash sales and it’s book results have not rejected by both the learned lower authorities. Ram Saran Dass & Sons 3 6. The facts also remains that the assessee has not proved source of the impugned cash deposits in the entire satisfaction of the learned lower authorities. Be that as it may, it is deemed appropriate in these peculiar facts that a lump sum addition of Rs.1,00,000/- only out of that in question to the tune of Rs.26,50,000/-; would be just and proper with a rider that the same shall not be treated as a precedent. The assessee gets relief of Rs.25,50,000/- in other words.

Next comes bad debts deduction disallowance of Rs.2,31,747/- made by both the learned lower authorities on the ground that the assessee has not placed on record a list of the concerned parties. A perusal of page 89 in the assessee’s paper book makes it clear that it had indeed filed a list of all the concerned parties before the learned assessing authority in the course of assessment proceedings. That being the case, I hereby quote T.R.F. Ltd. vs. CIT (2010) 323 ITR 397 (SC) to hold that the impugned bad debts is not sustainable and the same is directed to be deleted.

Lastly comes section 40(b) disallowance of the assessee’s partners’ remuneration reading a sum of Rs.7,20,000/- made in both the lower proceedings. The Revenue vehemently argues that the assessee has all along not been able to above to prove as to whether it’s twin partners are working partners as per the Ram Saran Dass & Sons 4 assessment discussion. A perusal of the assessee’s partnership deed at page no. 128 indicates that it is all along having two partners Sh. Prayag Raj Arora and Sh. Arun Arora since April 2009. That being the case, I find no merit in the learned lower authorities impugned disallowance. The same is directed to be deleted.

So far as assessee’s assessment under Section 115BBE is concerned, we quote 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 held that the said provision applied for transactions done on or after 01.04.2017 only.

This assessee’s appeal is partly allowed. Order Pronounced in the Open Court on 29/05/2025. (Satbeer Singh Godara)