ASHWANI KUMAR,DELHI vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 63(1), DELHI, DELHI

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ITA 3398/DEL/2026Status: DisposedITAT Delhi10 September 2026AY 2017-183 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that while the assessee could not fully reconcile the cash deposits with sales, a lumpsum addition of Rs. 20 lakhs would be just and proper. It also directed that the assessee be assessed under normal provisions, not Section 115BBE, as the provision was effective from April 1, 2017.

What were the facts?

The assessee, engaged in the business of manufacturing milk products, made cash deposits of Rs. 4,66,00,000/- during demonetization. The Assessing Officer treated these deposits as unexplained under Section 68 of the Income-tax Act, 1961.

What were the issues?

Whether cash deposits made during demonetization can be treated as unexplained income under Section 68, and whether Section 115BBE is applicable to the assessment year.

Which sections of the Income-tax Act were involved?

Section 68,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘A’ NEW DELHI

Before: SHRI SATBEER SINGH GODARA & SHRI NAVEEN CHANDRA

For Appellant: Adv. Sh. Tarun Chanana, Adv
Hearing: 29.07.2026Pronounced: 29.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘A’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No.3398/Del/2026 Assessment Year: 2017-18 Sh. Ashwani Kumar, Vs. ACIT, 27, Rani Jhansi Road, Circle – 63(1), Central Delhi, Delhi Delhi PAN: AGHPK5756G (Appellant) (Respondent) Assessee by Sh. Gaurav Jain, Adv. Sh. Tarun Chanana, Adv. Department by Sh. Balkishan Gopal, Sr. DR Date of hearing 29.07.2026 Date of pronouncement 29.07.2026 ORDER PER SATBEER SINGH GODARA, JM This assessee’s appeal for assessment year 2017-18, arises against the Commissioner of Income Tax (Appeals) -29 [in short, the “CIT(A)”], New Delhi’s order dated 08.01.2026 passed in case no. CIT(A), Delhi-20/10500/2019-20, 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.

ITA No.3398/Del/2026

2.

Coming to the assessee’s sole substantive ground, learned CIT(A) has erred in law and on facts in confirming the Assessing Officer’s action treating the assessee’s cash deposits during demonetization amounting to Rs. 4,66,00,000/- as unexplained u/s 68 of the Act. 4. Both the learned representatives vehemently reiterate their respective stands in support and against the impugned cash deposit addition. There does not seem to be much a dispute between the parties that the assessee is engaged in the business of manufacturing of milk products such as doodh, ghee, paneer etc. under the name and style of M/s. Shudh Garhwal Paneer Nirmatha Sangh. He has further declared total sales turnover of Rs.156,05,13,744/- out of which cash sales was Rs.11,66,29,369/- as per the lower appellate discussion. 5. That being the case, it could safely be presumed that although the assessee could not reconcile and verify his impugned cash deposits forming part of sales of milk products to the satisfaction of the Assessing Officer, the same could be termed as the sole reason for rejecting his entire explanation as well. We thus deem it appropriate in this factual backdrop that a lumpsum addition of

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ITA No.3398/Del/2026

Rs.20 lakhs only in the assessee’s hands 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. 6. So far as assessee’s assessment under section 115BBE is concerned, we 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. No other ground or argument has been pressed before us. 7. This assessee’s appeal is partly allowed. Order pronounced in the open court on 29th July, 2026 Sd/- Sd/- (NAVEEN CHANDRA) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 10th September, 2026. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi

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