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Facts
The assessee's appeal for AY 2017-18 arose against the order of the CIT(A)/NFAC, concerning proceedings under Section 147 r.w.s. 144 of the Income Tax Act, 1961. The issue involved cash deposits of Rs. 1,37,79,830/- during demonetization, treated as unexplained money under Section 69A r.w.s. 115BBE.
Held
The Tribunal acknowledged the assessee's business of trading cotton cloth, but noted the failure to reconcile or verify cash sales. A lump sum addition of Rs. 10,00,000/- was considered appropriate as profit element on business sales, with a rider that it should not be a precedent. Regarding Section 115BBE, the Tribunal held that it applies only to transactions after 01.04.2017.
Key Issues
Whether the cash deposits during demonetization were unexplained money and the applicability of Section 115BBE to the assessment.
Sections Cited
147, 144, 69A, 115BBE
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Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI
Before: Sh. Satbeer Singh Godara&
ORDER
Per Satbeer Singh Godara, Judicial Member:
This assessee’s appeal for Assessment Year 2017-18, arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2024-25/1072033648(1) dated 09.01.2025, in proceedings u/s 147 r.w.s. 144 of the Income Tax Act, 1961 (in short “the Act”).
Case called twice. None appears at the assessee’s behest. It is accordingly proceeded ex-parte.
It next emerges with the able assistance coming from the Revenue side that the assessee/appellant is aggrieved against both the learned lower authorities’ respective assessment and lower appellate findings treating it’s cash deposits of
That being the case, the Revenue could hardly dispute that the assessee/firm has already been held is engaged in trading of cotton cloth business throughout the country. This being the clinching position, we are of the considered view that possibility of the assessee’s cash sales in such a trading activity could not be altogether ruled out although it has failed to plead and prove the same by way of necessary reconciliation and verification before both the learned lower authorities. Be that as it may, we are of the considered view in this factual backdrop that a lump sum addition of Rs.10,00,000/- only in the assessee’s hands representing profit element on the foregoing business sales would be just and proper with a rider that the same shall not be treated as a precedent. We order accordingly. Necessary computation shall follow as per law.
So far as assessee’s assessment under Section 115BBE is concerned, we 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.