CAMTECH HEAVY ENGINEERING COMPANY,DELHI vs. DCIT CIRCLE 28(1), DELHI, CIVIC CENTRE, MINTO ROAD

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ITA 975/DEL/2026Status: DisposedITAT Delhi01 July 2026AY 2017-184 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found that while the issue was factual, the assessee had a reasonable case. Therefore, the addition was restricted to Rs. 4,00,000/-, and relief was granted on the remaining amount. The tax on the sustained addition was directed to be at normal rates, not 60% as per Section 115BBE.

What were the facts?

The Assessing Officer added Rs. 45,68,500/- as unexplained cash deposit during demonetization. The assessee failed to provide sufficient evidence to the AO and the First Appellate Authority, who confirmed the addition. The assessee then appealed to the ITAT.

What were the issues?

Whether the cash deposits made during demonetization were unexplained and subject to penalty, and if Section 115BBE applies to such deposits.

Which sections of the Income-tax Act were involved?

Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “H” NEW DELHI

Before: SHRI SATBEER SINGH GODARA & SHRI SANJAY AWASTHI

For Appellant: Shri Amit Kumar Gupta, Adv
For Respondent: Shri Bhopal Singh, CIT DR
Hearing: 01.07.2026

ITA No. 975/DEL/2026 CAMTECH HEAVY ENGINEERING COMPANY

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “H” NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER ITA No.975/DEL/2026 Assessment Year: 2017-18 CAMTECH HEAVY ENGINEERING Vs. DCIT, COMPANY, Circle 28(1), FF-10, First Floor, Omaxe Square, Delhi 110002. Zakir Nagar, New Friends Colony, Delhi 110025. PAN No. AAHFC8297N Appellant Respondent

Assessee by Shri Amit Kumar Gupta, Adv. Revenue by Shri Bhopal Singh, CIT DR Date of hearing: 01.07.2026 Pronouncement on 01.07.2026 O R D E R PER SANJAY AWASTHI, ACCOUNTANT MEMBER:

1.

This appeal arises from order dated 19.11.2025, passed by Ld. Addl./JCIT(Appeals)-2, Ludhiana, u/s 250 of the Income Tax Act, 1961 (hereafter as “the Act”). In this case, the Ld. AO added Rs.45,68,500/- as unexplained cash deposit during demonetization period. It is seen that before the Ld. AO the assessee could not apply fully with the terms of notices issued by him. However, even before the Ld. Addl./JCIT(A) the details filed could not convince the First Appellate Authority and the addition made by the Ld. AO was confirmed.

ITA No. 975/DEL/2026 CAMTECH HEAVY ENGINEERING COMPANY 1.1 The aggrieved assessee has approached the ITAT with certain additional grounds on the validity of assumption of jurisdiction (additional grounds 1 & 2). These two grounds have not been pressed before us and hence, they are dismissed.

1.2 The remaining additional grounds challenge the action of Ld. AO in making the impugned addition and the Ld. Addl./JCIT(A) in confirming the same.

2.

Before us the Ld. AR argued with the help of detailed paper books and case laws. It was stated that the amount in question was very much part of the legitimate business of the assessee and should not have been added. On a query from the Bench regarding the partial compliance before the Ld. AO to his notices and the inability of the assessee to convince the Ld. Addl./JCIT(A) with facts and documents, the Ld. AR stated that the assessee does not intend to pursue prolonged litigation in this matter. Thereafter, it was offered that some amount may be confirmed from the total added so that this matter could rest at this stage itself. Notwithstanding this offer, the Ld. AR stated that the assessee had a strong case on merit.

2.1 The Ld. DR relied on the orders of the authorities below.

3.

We have considered the rival submissions and have gone through the documents before us. We find that the issue of whether the cash

ITA No. 975/DEL/2026 CAMTECH HEAVY ENGINEERING COMPANY deposits were justified or not is an entirely factual matter for which the authorities below have not found enough evidence to grant relief to the assessee. However, considering the documents before us and the totality of facts & circumstances, it is felt that the assessee has a reasonable case in his favour. Accordingly, we deem it fit to restrict the addition to Rs.4,00,000/- and grant relief on the remaining amount.

3.1 It is also to be noted that following the case of S.M.I.L.E. Microfinance Limited reported in 179 taxmann.com 65 (Mad.) [2025] the tax on this amount of Rs.4,00,000/- cannot be @60% as per Section 115BBE of the Act. This proposition is derived from the following part of this order: -

“In the aforesaid objects and reasons nowhere it is stated that due to "demonetization" the unaccounted money ought to be charged 60 per cent rate of tax. It only states that step had been taken to curb black money by withdrawing specified Bank Notes of denomination of Rs.500 and Rs.1000. And also states the people may find illegal ways of converting their black money into black again, hence as per experts advice heavy penalty ought to be levied. From the language of the object “that instead of allowing people to find illegal ways of converting their black money into black again”. It is evident that the government has intended to impose the same for future transactions. Especially the use of word “again” in the object would clearly indicate it is for future transactions i.e. from 1.4.2017. Therefore, this Court is of the considered opinion that the revenue is empowered to impose 60% rate of tax for the transactions from 1.4.2017 onwards and not prior to the said cut-off date. And for prior transaction the revenue is empowered to impose only 30 per cent rate of tax. [Para 17]” The AO is directed to tax the amount sustained at normal rates, accordingly.

ITA No. 975/DEL/2026 CAMTECH HEAVY ENGINEERING COMPANY

4.

In the result, this appeal is partly allowed.

Order pronounced in the open court on 01.07.2026

Sd/- Sd/- (SATBEER SINGH GODARA) (SANJAY AWASTHI) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 08.07.2026 *Kavita Arora, Sr. P.S. Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI

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