SPACE 4 BUSINESS SOLUTIONS PRIVATE LIMITED,DELHI vs. DCIT, CENTRAL CIRCLE 3, DELHI, DELHI

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ITA 7156/DEL/2025Status: DisposedITAT Delhi12 March 2026AY 2017-18Bench: SHRI VIKAS AWASTHY (Judicial Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal found that the documentary evidence did not sufficiently establish that the cash deposits were part of normal business activities. Therefore, the issue was restored to the Assessing Officer for denovo adjudication after providing the assessee with an opportunity to be heard.

What were the facts?

The assessee claimed cash deposits during demonetization were from business receipts, providing VAT returns and financials. However, month-wise details of cash receipts and deposits were not furnished, and the nature of the business was not clearly established from records.

What were the issues?

Whether cash deposits made during demonetization were sufficiently explained as arising from normal business activities, and if not, whether the matter should be restored to the AO for fresh adjudication.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE

AI-generated summary — verify with the full judgment below

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

Hearing: 16/12/2025Pronounced: 12/03/2026

(A.Y.2017-18) Space 4 Business Solutions P. Ltd., 3588, Main Bazar Old Subzi Mandi, New Delhi 110007 ...... अपीलार्थी/Appellant PAN: AABCS-5900-P बिाम Vs. Deputy Commissioner of Income Tax, Circle 3, ARA Centre Jhandewalan Extn. ..... प्रनिवादी/Respondent New Delhi 110017 अपीलार्थी द्वारा/Appellant by : Shri Nitin Gulati, Advocate प्रधििािीद्वारा/Respondent by : Shri Manoj Kumar, Sr. DR सुिवाई की निथर्थ/ Date of hearing : 16/12/2025 घोषणा की निथर्थ/ Date of pronouncement : 12/03/2026 आदेश/ORDER PER VIKAS AWASTHY, JM:

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) (hereinafter referred to as ‘the Act’) dated 26.09.2025, for AY 2017-18.

2.

The assessee in appeal has assailed addition of Rs.35,61,000/- u/s. 69A r.w.s. 115BBE of the Income Tax Act, 1961(hereinafter referred to as ‘the Act’) on account of cash deposit during demonetization period.

3.

The case of assessee is that the cash deposits in the bank were out of cash business receipts. The assessee has filed a paper book containing 298 pages, inter alia containing VAT Returns to show that the assessee is carrying out business activity, bank account details, audited financials, etc. However, the assessee has not furnished month wise details of cash receipts and cash deposits in the bank. Further, it is not emanating from records the nature of assessee’s

business. Thus, on the basis of documentary evidences filed by the assessee it cannot be made out that the cash deposits in the bank were during normal course of business. Taking into consideration entire facts of the case, I deem it appropriate to restore the issue back to the AO for denovo adjudication, in accordance with law after affording reasonable opportunity of making submissions to the assessee.

4.

In the result, impugned order is set aside and appeal of the assessee is allowed for statistical purpose.

Order pronounced in the open court on Thursday the 12th day of March, 2026.

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