MOHAMMAD AFROZ KHAN,CENTRAL DELHI vs. INCOME TAX OFFICER , CIVIC CENTRE

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ITA 2135/DEL/2025Status: DisposedITAT Delhi28 May 2025AY 2017-18Bench: SHRI SATBEER SINGH GODARA (Judicial Member)4 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal noted that the assessee claimed to be engaged in business, and a small cash-in-hand amount was granted. It was held that the impugned cash deposits likely represented business turnover. A lumpsum addition of Rs. 2 lakhs was deemed appropriate in the interest of justice, with the rider that it should not be treated as a precedent. Regarding Section 115BBE, it was noted that the provision applies to transactions on or after 01.04.2017, and the assessee was directed to be assessed under normal provisions.

What were the facts?

The assessee's appeal for AY 2017-18 arose from proceedings under section 143(3). The assessee was proceeded ex-parte as no one appeared on his behalf. The Revenue argued that cash deposits of Rs.13,97,500/- made during demonetization were rightly added as unexplained.

What were the issues?

Whether the cash deposits made during demonetization are unexplained income, and the applicability of Section 115BBE.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 69A,Section 115BBE

AI-generated summary — verify with the full judgment below

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

Before: SHRI SATBEER SINGH GODARA

Hearing: 28.05.2025Pronounced: 28.05.2025

Date of hearing 28.05.2025 Date of pronouncement 28.05.2025 ORDER 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/250/2024-25/1072018363(1), dated 09.01.2025 involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

2.

Case called twice. None appears at the assessee’s behest. He is accordingly proceeded ex-parte.

3.

Learned departmental representative vehemently argues during the course of hearing that both the lower authorities have rightly added assessee’s cash deposits made during demonetization of Rs.13,97,500/- as unexplained under section 69A read with section 115BBE of the Act, in assessment order dated 06.12.2019 and upheld in the lower appellate discussion.

4.

That being the case, the Revenue could hardly dispute the fact that he had filed his return claiming himself as engaged in sale/purchase of building material, repair and maintenance etc. which stands accepted in principle in para 6 of the lower appellate discussion as his cash in hand claim of Rs.36,750/-, has already been granted. Meaning thereby that the necessary inference which would flow from the relevant facts is that the assessee’s impugned cash deposits; although not specifically reconciled before the lower authorities is his business turnover which deserves to be assessed qua the profit element embedded therein. It thus deemed appropriate in the larger interest of justice that a lumpsum addition of Rs. 2 lakhs only in the given facts 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.11,97,500/- in other words.

5.

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.

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