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Facts
The assessee's appeal for AY 2017-18 arose from an order upholding the assessment of cash deposits of Rs.4,35,76,000/- as business turnover, with a profit element assessed at 10%. The revenue argued that the assessee failed to explain the source of these deposits.
Held
The Tribunal noted that the assessee had been held to be a commission agent with a miniscule margin, and that the cash deposits were explained, though not reconciled item-wise. A lump-sum addition of Rs.4,50,000/- (inclusive of profits already declared) was deemed appropriate, with a clarification that it should not be treated as a precedent. The applicability of Section 115BBE was also discussed.
Key Issues
Whether the cash deposits were adequately explained as business turnover and the appropriateness of the assessed profit element and any additional disallowance. Applicability of Section 115BBE for the relevant assessment year.
Sections Cited
143(3), 271B, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. Satbeer Singh Godara
Asstt. Year : 2017-18 Mohd Javed, Vs Income Tax Officer, 736, Gali Fazal Pura, Darya Ganj, Ward-48(1), Sui Walan, Delhi-110002 New Delhi-110002 (APPELLANT) (RESPONDENT) PAN No. AGPPJ7753C Assessee by: Sh. G. S. Kohli, CA Revenue by : Sh. Manoj Kumar, Sr. DR Date of Hearing: 27.05.2025 Date of Pronouncement: 27.05.2025 ORDER
This assessee’s appeal for Assessment Year 2017-18, arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2024-25/1073536390(1) dated 20.02.2025, 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 with the able assistance coming from both the parties that the learned lower authorities have assessed the assessee’s cash deposits of Rs.4,35,76,000/-; as business turnover, for the purpose of assessing the profit element therein @ 10%, coming to Rs.43,57,600/-, in the course of assessment framed on 27.12.2019 and upheld in the lower appellate discussion.
Mohd Javed 4. Learned departmental representative vehemently argues that both the learned lower authorities have already granted substantive relief to the assessee despite the fact that he had failed to explain the source of the above cash deposits in the course of assessment as well as in the lower appellate proceedings. That being the case, a perusal of the assessee’s paper book at pages 16 onwards reveals that the earlier co- ordinate bench; while dealing with section 271B penalty, has already held that he is a commission agent earning a miniscule margin on various products marketed and sold by M/s Gujarat Cooperative Milk Marketing Federation Ltd. which comes to 0.55% to 12.16% on various products. It is therefore clear all the assessee’s cash deposits already stand explained although not specifically reconciled item wise. Be that as it may, it is deemed appropriate in the larger interest of justice that a lump sum addition of Rs.4,50,000/- only (inclusive of his profits already declared of Rs.3,37,620/-) would be just and proper with a rider that the same shall not be treated as a precedent. Necessary computation shall follow as per law.
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.