SATISH KUMAR,DELHI vs. ASSESSING OFFICER, DELHI

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ITA 7713/DEL/2025Status: DisposedITAT Delhi29 April 2026AY 2017-184 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found that while the assessee failed to fully satisfy the lower authorities, the nature of their business allowed for cash accumulations. Therefore, a lumpsum addition of Rs. 5,00,000/- was deemed just and proper, with the remaining amount being relieved. Section 115BBE was held to apply only to transactions after 01.04.2017.

What were the facts?

The assessee deposited Rs. 1,49,20,000/- in cash during demonetisation. The Assessing Officer and CIT(A) treated these deposits as unexplained. The assessee was engaged in wholesale and retail trading of bidi, tea, and soya oil, declaring substantial business profits and cash sales.

What were the issues?

Whether cash deposits made during demonetisation are unexplained income. Applicability of Section 115BBE to the assessment year in question.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

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

Before: SHRI SATBEER SINGH GODARA & SHRI MANISH AGARWAL

For Respondent: Ms. Ankush Kalra, Adv
Hearing: 16.04.2026Pronounced: 16.04.2026

PER SATBEER SINGH GODARA, JM 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/250/2025-26/1069725184(1), dated 17.10.2024 involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

ITA No.7713/Del/2025 Case called twice. None appears at the assessee’s/appellant behest. He is accordingly proceeded ex-parte.

2.

The Revenue vehemently argues during the course of hearings that both the learned lower authorities have rightly treated the assessee’s cash deposits during demonetisation amounting to Rs. 1,49,20,000/- as un- explained u/s 69A r.w.s. 115BBE of the Act; in assessment order dated 25.12.2019, as upheld in the lower appellate discussion. We are further taken to page 3 at Para 4.1 in the assessment discussion wherein the learned Assessing Officer appears to have noted some abnormalities in the assessee’s corresponding figures of sales or purchases/ gross profits with percentage and cash deposits; respectively.

3.

We have given our thoughtful consideration to the assessee’s and the Revenue’s respective rival pleadings against and in support of the impugned addition. We first of all sought to verify the assessee’s regular business activities. We are informed that the learned CIT(A)/NFAC 2 | P a g e

ITA No.7713/Del/2025 has made it clear at page 9 that he is engaged in wholesale and retail trading of Pataka Bidi and Pataka Tea & Soya Oil etc all along. We further observe at the cost of repetition that the assessee has been declaring substantial business profits as well as cash sales in the impugned as well as in the preceding assessment years. There could be further no denial to the fact that the assessee’s regular business activity of bidi, tea and soya oil sales; be it on whole sale or on retail, involves highly unorganized sectors wherein possibility of such cash sales and cash in hand accumulations could not be altogether denied although he has failed to plead and prove the same to the entire satisfaction of both the learned lower authorities.

5.

Faced with this situation and in the interest of justice, we deem it appropriate that a lumpsump addition of Rs. 5,00,000/- in the assessee’s hands here would be just and proper with a rider that the same shall not be treated as a precedent. The assessee gets relief of Rs. 1,44,20,000/- in other words. We further 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) settling the issue that section 115BBE would come into 3 | P a g e

ITA No.7713/Del/2025 effect on the transaction done on or after 01.04.2017 only. The assessee is accordingly directed to be assessed under “normal” provisions only. Necessary computation shall follow as per law.

6.

The assessee’s appeal is partly allowed.

Order pronounced in the open court on 16th April, 2026.

Sd/- Sd/- (MANISH AGARWAL) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 29.04.2026 Pooja Mittal/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi

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