GYANVEER SINGH,FARIDABAD vs. ITO OSD-1, FARIDABAD

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ITA 680/DEL/2026Status: DisposedITAT Delhi15 July 2026AY 2017-183 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal partially allowed the appeal, reducing the addition on cash deposits to Rs. 3 lakhs and deleting the disallowance of cash purchases. The Tribunal noted that section 115BBE applies from April 1, 2017, and that cash purchases were made from business sales.

What were the facts?

The assessee challenged the addition of cash deposits during demonetization and the disallowance of cash purchases. The assessee was engaged in the country liquor business, and the lower authorities treated cash deposits as unexplained income and disallowed cash purchases.

What were the issues?

Whether cash deposits during demonetization are unexplained income and whether cash purchases are disallowable under Section 40A(3).

Which sections of the Income-tax Act were involved?

Section 68,Section 115BBE,Section 40A(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘H’, NEW DELHI

Before: SHRI SATBEER SINGH GODARA & SHRI KRINWANT SAHAY

For Appellant: Dr. Rakesh Gupta, Adv
Hearing: 06.07.2026Pronounced: 06.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘H’, NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER ITA No. 680/Del/2026 Assessment Year: 2017-18

Sh. Gyanveer Singh Vs Income Tax Officer (OSD)- House No. 18, 20 Feet Road, 1, Sector-91, Vinay Nagar, Faridabad, Haryana Near Agbanpur, Faridabad- 121001 Haryana (APPELLANT) (RESPONDENT) PAN No. BMVPS4559Q

Assessee by: Dr. Rakesh Gupta, Adv. Sh. Saksham Aggarwal, CA Revenue by : Sh. Sudip Majumdar, Sr. DR

Date of Hearing: 06.07.2026 Date of Pronouncement: 06.07.2026 ORDER

This assessee’s appeal for Assessment Year 2017-18 arises against the Commissioner of Income Tax(Appeals)/National Faceless Appeal Centre (for short, ‘CIT(A)/NFAC’), Delhi’s DIN & order No. ITBA/NFAC/S/250/2025-26/1084867656(1), dated 16.01.2026, involving proceedings u/s 143(3) of the Income Tax Act, 1961; hereinafter referred to as, “the Act”.

Heard both the parties at length. Case file perused.

2 2. It transpires during the course of hearing that the assessee/appellant herein raises his twin substantive grounds inter alia challenging both the learned lower authorities’ action, assessing his cash deposits during demonetization amounting to Rs. 85,22,500/- as unexplained u/s 68 r.w.s. 115BBE followed by section 40A(3) disallowance of cash purchases to the tune of Rs. 1,99,63,810/- in assessment order dated 10.12.2019, as upheld in the lower appellate discussion.

3.

Both the parties vehemently reiterate their respective stands against and in support of both the aforesaid issues. Coming to the assessee’s cash deposits, there does not appear to be much a dispute between the parties that he is admittedly engaged in country liquor business predominantly serving rural strata of the society wherein possibility of the same representing cash sales in such a segment could not be altogether ruled out. It is further made clear as a matter of abundant caution that both the learned lower authorities have very fairly not rejected his books of accounts treating these cash deposits as regular business sales although he has failed to plead and prove the same in the entirety in both the lower proceedings. Faced with this situation and in the larger interest of justice, we deem it appropriate to conclude that a lumpsump addition of Rs. 3 lakhs only shall cover the assessee’s all short-falls with a rider that the same shall not be treated as a precedent. He gets relief of Rs. 82,22,500/- regarding the above former addition in other words.

3 4. 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. The assessee shall be assessed under “normal” provisions therefore.

5.

The very analogy ought to be followed regarding the assessee’s latter substantive ground challenging the impugned section 40A(3) disallowance of cash purchases of the relevant liquor stock as well what all he appears to have done is to utilise his regular business sales in making cash purchases from the authorised distributors duly approved by the state government. Deleted accordingly.

No other ground or argument has been pressed before us.

6.

This assessee’s appal is partly allowed in above terms

Order Pronounced in the Open Court on 06.07.2026.

Sd/- Sd/- (KRINWANT SAHAY) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 15.07.2026 *Pooja Mittal, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR

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