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Facts
The assessee's appeal for AY 2017-18 arose against the CIT(A)'s order confirming the addition of Rs. 10,26,500/- as unexplained cash deposits during demonetization. The lower authorities failed to consider the assessee's socio-economic status and past savings, nor give credit for cash withdrawals.
Held
The Tribunal held that a lumpsum addition of Rs. 1 lakh would be just and proper, with a rider that it would not be considered a precedent, granting relief of Rs. 9,26,500/- to the assessee. Regarding Section 115BBE, it was held that the provision applies to transactions on or after 01.04.2017.
Key Issues
Whether the addition of unexplained cash deposits during demonetization is justified. Applicability of Section 115BBE to the transaction.
Sections Cited
143(3), 115BBE
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Income Tax Appellate Tribunal, DELHI BENCH: “SMC” NEW DELHI
Before: SHRI SATBEER SINGH GODARA
Date of hearing 02.02.2026 Date of pronouncement 02.02.2026 ORDER This assessee’s appeal for assessment year 2017-18, arises against the Commissioner of Income Tax (Appeals)/Addl./JCIT(A)- 2 [in short, the “CIT(A)”], Chennai’s DIN and order no. ITBA/APL/S/250/2025-26/1081812663(1), dated 16.10.2025 involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.
Coming to the assessee’s sole substantive ground herein, it emerges during the course of hearing that he is aggrieved against both the learned lower authorities’ respective findings treating his cash deposits during demonetization amounting to Rs.10,26,500/- as unexplained, in assessment order dated 29.11.2019 as upheld in the lower appellate discussion.
That being the case, the Revenue could hardly dispute that neither both the learned lower authorities have considered the assessee’s socio-economic status all along wherein his accumulated past savings in hand could not be altogether ruled out nor any credit regarding his cash withdrawals amounting to Rs.9.93 lakhs, has been given. Be that as it may, it is thus deemed appropriate in the larger interest of justice that a lumpsum addition of Rs.1 lakh only in the hands of the assessee would be just and proper with a rider that the same shall not be considered as a precedent. The assessee gets relief of Rs.9,26,500/- in other words.
So far as assessee’s assessment under section 115BBE is concerned, I quote S.M.I.L.E. Microfinance Ltd. Vs. ACIT, W.P. (MD) No.2078 of 2020 & 1742 of 2020, dated 19.11.2024 (Madras) that the impugned statutory provision would come into effect on the transaction done on or after 01.04.2017 only. The assessee is 2 | P a g e accordingly directed to be assessed under the normal provision as per law.