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Facts
The assessee's appeal pertains to Assessment Year 2017-18, arising from an order related to cash deposits made during demonetization. The lower authorities treated these deposits, amounting to Rs. 28,01,000/-, as unexplained under Section 68 read with Section 115BBE of the Income Tax Act.
Held
The Tribunal observed that the assessee's business of furniture sales and trading involved an un-organized retail sector, and the cash deposits could be inferred as business sales. A lump sum addition of Rs. 2,01,000/- was considered appropriate for the Gross Profit, granting the assessee relief of Rs. 26,00,000/-. Regarding Section 115BBE, the Tribunal noted a ruling that it applies only to transactions on or after 01.04.2017.
Key Issues
Whether cash deposits made during demonetization are unexplained, and applicability of Section 115BBE for the relevant period.
Sections Cited
143(3), 68, 115BBE
AI-generated summary — verify with the full judgment below
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/250/2025-26/1082942685(1) dated 24.11.2025, 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.
Coming to the assessee’s sole substantive ground canvassed in the instant appeal, he is stated to be aggrieved against both the learned lower authorities respective assessment and lower appellate findings holding his cash deposits during demonetization amounting to Rs.28,01,000/- as unexplained u/s 68 r.w.s. 115BBE of the Act.
That being the case, it is noticed that the assessee’s principle business activity of running furniture sales and Yogesh Pruthi trading etc. is not in dispute as fairly admitted in assessment order itself. All this gives rise to prima facie the necessary inference that the impugned cash deposits represent his business sales in cash only since involving an un-organized retail sector. Be that as it may, it is deemed appropriate that a lump sum addition of Rs.2,01,000/- representing GP only would be just and proper with a rider that the same shall not be treated as a precedent. The assessee gets relief of Rs.26,00,000/- in other words. 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.