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Facts
The assessee's appeal for Assessment Year 2017-18 arose from cash deposits of Rs. 11,50,000 during demonetization, which were treated as unexplained and assessed under Section 115BBE by lower authorities. The assessee claimed the source was Rs. 10,00,000 received in December 2015, subsequent withdrawals, and past savings.
Held
The Tribunal found neither the assessee's explanation of retaining cash for a year nor the department's dismissal of it entirely convincing. In the interest of justice, the addition was restricted to Rs. 1,00,000, granting relief of Rs. 10,50,000. It was also clarified that Section 115BBE applies to transactions on or after 01.04.2017.
Key Issues
The key issues were the adequacy of the explanation for cash deposits during demonetization, the quantum of addition for unexplained cash, and the applicability of Section 115BBE to transactions prior to April 1, 2017.
Sections Cited
143(3), 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. Satbeer Singh Godara
Asstt. Year : 2017-18 Harsheen Kaur Kohli, Vs Income Tax Officer, House No. 20, Road No. 43, Punjabi Ward-70(4), Bagh (West), New Delhi-110026 New Delh (APPELLANT) (RESPONDENT) PAN No. CHDPS4866G Assessee by: Sh. Anup Gill, Adv. & Ms. Priyanka Jindal, Adv. Revenue by : Sh. Sanjay Kumar, Sr. DR Date of Hearing: 22.04.2025 Date of Pronouncement: 22.04.2025 ORDER
This assessee’s appeal for Assessment Year 2017-18, arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2024-25/1068989006(1) dated 23.09.2024, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
It transpires during the course of hearing that both the learned lower authorities have treated the assessee’s cash deposits during demonetization amounting to Rs.11,50,000/- as unexplained followed by assessment thereof u/s 115BBE of the Act.
Harsheen Kaur Kohli 4. Faced with this situation, learned counsel has invited the tribunal’s attention to page 55 in assessee’s paper book indicating her to have received Rs.10,00,000/- from Kokli Autocomp on 30.12.2015 followed by withdrawals thereof of Rs.5,00,000/- each on the same day and 31.12.20215; respectively. Learned counsel further refers to the assessee’s bank statement at page 58 as well that it was these withdrawals coupled with her past savings which formed the source of the cash deposits of Rs.11,50,000/- made during demonetization. The Revenue on the other hand strongly supports the impugned addition made in the assessee’s hands.
I have given my thoughtful consideration to the foregoing vehement rival submissions and see no reason to accept either party’s stand in entirety. This is for the precise reason that neither the assessee has been able to plead and prove herself to have retained the entire cash withdrawals of Rs.10,00,000/- for almost one full calendar year nor the department could be allowed to simply brush aside her explanation herein. Be that as it may, it is deemed appropriate in the larger interest of justice to restrict the impugned addition of Rs.11,50,000/- to that a lump sum figure of Rs.1,00,000/- only with a rider that the same shall not be treated as a precedent. The assessee gets relief of Rs.10,50,000/-.
Harsheen Kaur Kohli 6. It is further made clear before parting that the learned lower authorities action assessing the assessee u/s 115BBE is concerned, hon’ble Madras high court in SMILE Microfinance Ltd. Vs. ACIT, W.P. (MD) No. 2078 of 2020 & 1742 of 2020 dated 19.11.2024 (Mad.) has already settled the issue against the department that the law applies to the transaction on or after 01.04.2017 only. Necessary computation shall follow as per law.
This assessee’s appeal is partly allowed. Order Pronounced in the Open Court on 22/04/2025.