What did the Tribunal hold?

The Tribunal held that while the cash deposits were not fully explained, a lumpsum addition of Rs. 2 lakhs was just and proper, considering the assessee's prior cash withdrawals. The appeal was partly allowed.

The assessee made cash deposits of Rs. 12.50 lakhs during demonetization, which were treated as unexplained. The assessee claimed these deposits were from previous cash withdrawals totaling Rs. 15 lakhs.

What were the issues?

Whether cash deposits made during demonetization are unexplained income, and if so, to what extent credit should be given for prior cash withdrawals.

Yash Sherawat, Mahendergarh vs ITO | ITAT Delhi 2026

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

Before: SHRI SATBEER SINGH GODARA

For Appellant: Adv. Sh. Prashant Goel, CA

Hearing: 03.08.2026Pronounced: 03.08.2026

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: “SMC” NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER ITA No.6414/Del/2026 Assessment Year: 2017-18 Yash Sherawat, Vs. Income Tax Officer, 1439, College Road, Nangal Ward-2, Choudhary, Mahendergarh, Narnaul, Haryana Haryana- 123 023 PAN: FRVPS3550Q (Appellant) (Respondent) Assessee by Sh. Rajesh Goel, Adv. Sh. Prashant Goel, CA Department by Sh. Manoj Kumar, Sr. DR Date of hearing 03.08.2026 Date of pronouncement 03.08.2026 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/250/2025-26/1085952171(1), dated 12.02.2026 involving proceedings under section 144 of the Income- tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.

ITA No.6414/Del/2026 Yash Sherawat

For the reasons stated in the assessee’s condonation averments, delay of 39 days in filing of the instant appeal is condoned in light of Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC).

Next comes the sole substantive issue between the parties. The assessee admittedly appears to have made cash deposits during demonetization amounting to Rs. 12.50 lakhs is being treated as unexplained in both assessment order as well as in the lower appellate discussion. This is what forms the sole substantive issue for the tribunal’s apt adjudication herein.

It is in this factual backdrop that the learned counsel representing the assessee invites the tribunal’s attention to page 14 in the CIT(A) lower appellate discussion indicating his total cash withdrawals right from 21.03.2015 onwards till 13.12.2016 amounting to Rs. 15 lakhs which is treated to be his preceding withdrawals as the source of the impugned cash deposits all along to the entire satisfaction of both the learned lower authorities be that as it may. The fact however remains that they have not

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ITA No.6414/Del/2026 Yash Sherawat

granted him credit of his foregoing cash withdrawals as well. It is thus deem proper in the larger interest of justice that a lumpsump addition of Rs. 2 lakhs only in the assessee’s hands shall be just and proper with a rider that the same shall be just and proper with a rider that the same shall not be treated as a precedent one. He gets relief of Rs. 10.50 lakhs in other words. Necessary computation shall follow as per law.

Learned counsel quotes S.M.I.L.E. Microfinance Ltd. Vs.

ACIT, W.P. (MD) No.2078 of 2020 & 1742 of 2020, dated 19.11.2024 (Madras) wherein their lordship has settled the issue that the impugned statutory provision of section 115BBE would come into effect on the transaction done on or after 01.04.2017.

This assessee’s appeal is partly allowed. Order pronounced in the open court on 03.08.2026 Sd/- (SATBEER SINGH GODARA) JUDICIAL MEMBER Dated: 18.08.2026 Pooja Mittal/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi 3 | P a g e

YASH SHERAWAT,MAHENDERGARH vs. ITO WARD 2, NARNOUL

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