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Facts
The assessee appealed against the assessment order treating cash deposits of Rs. 27,01,243/- during demonetization as unexplained. The assessee is engaged in the tyre sales and trading business and had returned income of Rs. 15,16,992/-.
Held
The Tribunal held that the cash deposits represented his wholesale and retail business, which is an unorganized sector. A lump sum addition of Rs. 2,50,000/- was deemed appropriate as profit element, to not be treated as a precedent. Section 115BBE is applicable only for transactions done on or after 01.04.2017.
Key Issues
Whether the cash deposits made during demonetization were unexplained and whether Section 115BBE was applicable.
Sections Cited
143(3), 68, 115BBE
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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. Satbeer Singh Godara
ORDER This assessee’s appeal for Assessment Year 2017-18 arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2025-26/1079468935(1) dated 11.08.2025, 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 emerges during the course of hearing that the assessee/appellant is aggrieved against both the learned lower authorities’ respective assessment and lower appellate findings treating his cash deposits of Rs.27,01,243/- during demonetization, as unexplained u/s 68 r.w.s. 115BBE of the Act.
Kamlesh Kumar Aggarwal 4. That being the case, it is noticed from a perusal of the case records that the assessee’s principle business activity of engaged in tyre sales and trading business has nowhere been disputed. He further appears to have returned income amounting to Rs.15,16,992/- going by the assessment order itself. The necessary prima facie inference which would arise in his favour is that the impugned cash deposits represents his wholesale and retail is an unorganized sector wherein he couln't rectify and verify all the relevant facts to the entire satisfaction of both the learned lower authorities action. Be that as it may, it is deemed appropriate in this larger interest of justice that a lump sum addition of Rs.2,50,000/- representing the assessee’s profit element in the said cash deposits would be just and proper with a rider that the same shall not be treated as a precedent. Necessary computation shall follow as per law.
So far as assessee’s assessment under Section 115BBE is concerned, I quote S.M.I.L.E Microfinance Limited Vs. The ACIT CC-1 in W.P.(MD) No.2078 of 2020 & W.M.P. (MD) No. 1742 of 2020 held that the said provision applied for transactions done on or after 01.04.2017 only. The assessee is accordingly directed to be assessed under normal provisions only.