NORTH DELHI BEVERAGES P LTD,DELHI vs. ACIT, CIRCLE-18(2), DELHI

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘G’, NEW DELHI BEFORE SH. SATBEER SINGH GODARA, JUDICIAL MEMBER AND SH. NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 1219/Del/2026 (Assessment Year : 2017-18) M/s. North Delhi Beverages Vs. Assistant Commissioner of (P.) Ltd. Income Tax 5/109, II Floor, Nirankari Circle – 18(2) Colony, Delhi – 110 009 Delhi PAN No. AACCN 9335 L (APPELLANT) (RESPONDENT) Assessee by Shri Ankit Kumar, Adv. Revenue by Shri Ravi Choudhary, Sr. D.R. Date of hearing: 18.05.2026 Date of Pronouncement: 18.05.2026

ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER : This captioned appeal has been filed by the assessee against the order of the learned Commissioner of Income Tax (Appeals)-NFAC-Delhi [‘CIT(A)’ in short] dated 14.10.2024 arising from the assessment order dated 31.12.2019 passed by the Assistant Commissioner of Income Tax, Circle – 18(2), Delhi under Section 143(3) of the Income Tax Act, 1961 (‘the Act’) concerning Assessment Year (A.Y.) 2017-18.

ITA No. 1219/DEL/2026 [A.Y 2017-18] North Delhi Beverage Pvt. Ltd. vs. ACIT 2. The grounds raised by the assessee are as under : 1. “That the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) has erred both in law and on facts in upholding an addition made of Rs. 45,70,500/- out of Rs. 78,97,532/- representing alleged unexplained cash deposits in the bank account of the appellant during the period of demonetization and erroneously held unexplained money u/s 69A of the Act read with section 115BBE of the Act as 1.1 That the learned Commissioner of Income Tax (Appeals) has also erred both in law and on facts in upholding the addition by failing to appreciate that once books of accounts are correct and complete and therefore, the sales as recorded in the books of accounts out of stock available with the appellant could to be regarded as cash sales merely on statements without disregarding the factual matrix/evidence tendered by the appellant. 1.2 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that once the purchases declared in the books of accounts were duly accepted then no subjective assumption and presumption could be made a basis to subjective assumption and presumption could be made a basis to assume, allege and conclude that sales made out of such purchases were unexplained money taxable under section 69A of the Act. 1.3 That finding of the learned Commissioner of Income Tax (Appeals) that "there are entries totaling to Rs.45,70,500/- in the months of September, October and November, 2016 (till 8.11.2016). The appellant has not been able to prove the said receipt of cash from Jasola Unit only during the months of September to November (till 8.11.2016). There have been no entries of inter unit transfer in any of the earlier months. The appellant has not been able to justify the reasons for this transfer and that too in cash" is factually incorrect, legally misconceived, and wholly untenable. 1.4 That further finding of the learned Commissioner of Income Tax (Appeals) that "the appellant has not been able to prove with documentary evidence as to how this cash was brought in Delhi from Jasola and reason for isolated transfers in these three months. Therefore, inter-unit transfer cash has not been conclusively proved to be a genuine cash transfer" is also factually incorrect, legally misconceived, and wholly untenable. 2. That the notice issued u/s 143(2) of the Act is not in accordance with CBDT notification dated 23.6.2017 vide F. No. 225/157/2017/ITA-II and therefore order of assessment is illegal, invalid and void-ab- initio. 3. That without prejudice to the above and in the alternative, even otherwise, the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in holding that amount deposited in the bank by the appellant is taxable as income under section 69A of the Act and thereafter computed the demand in accordance with the

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ITA No. 1219/DEL/2026 [A.Y 2017-18] North Delhi Beverage Pvt. Ltd. vs. ACIT rates specified in section 115BBE of the Act as amended by Taxation Laws (Second Amendment) Act, 2016.”

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ITA No. 1219/DEL/2026 [A.Y 2017-18] North Delhi Beverage Pvt. Ltd. vs. ACIT 7. We have heard the rival submissions and have perused the relevant material on record. In the instant case, we find that the assessee has attempted to prove the entire cash deposit during demonetization period as being out of cash sales and recorded in the books of account. Although the assessee, prima facie, appears to have discharged its onus of explaining the cash deposits, it’s contentions to prove the cash deposits during the demonetization period, hardly deserves to be accepted in entirety especially when the assessee could not give satisfactory explanation for the disproportionate increase in cash sales just before demonetization period. On the other hand, the Revenue’s endeavour to disbelieve the assessee’s contention that cash deposits are supported by stock register, purchase records, cannot be fully justified. In this factual matrix, there is some element of failure to explain some of the cash deposits, cannot be ruled out. Be that as it may, it is deemed appropriate, in larger interest of justice, that a lump-sum addition of Rs. 1.5 lakh only would be just and proper with a rider that the same shall not be treated as a precedent, so as to cover all loopholes. The assessee’s ground on this count is partly allowed.

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ITA No. 1219/DEL/2026 [A.Y 2017-18] North Delhi Beverage Pvt. Ltd. vs. ACIT (MD) No.2078 of 2020 & 1742 of 2020, dated 19.11.2024 (Madras) has held that the impugned statutory provision would come into effect on the transaction done on or after 01.04.2017 only. Accordingly, we direct the AO to tax the addition under normal provisions of tax and not under the provisions of 115BBE.

Order pronounced in the open court on 18.05.2026

Sd/- Sd/- (SATBEER SINGH GODARA) (NAVEEN CHANDRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Date:- 26.05.2026 Priti Yadav, Sr. Ps* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI

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