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Facts
The assessee's appeal for Assessment Year 2017-18 arose against the order in proceedings under section 147 r.w.s. 144 of the Income Tax Act. The assessee, engaged in trading handloom and textiles, did not appear for the hearing and was proceeded ex-parte. The lower authorities added cash deposits of Rs.17,31,450/- as unexplained.
Held
The Tribunal noted that the assessee is a regular return filer engaged in business. While the cash deposits were not fully reconciled, they were deemed to represent business turnover. A further Gross Profit (GP) addition of 8% was made on these deposits. Regarding Section 115BBE, the Tribunal held it applies only to transactions after April 1, 2017, directing assessment under normal provisions for earlier periods.
Key Issues
Whether the cash deposits were correctly treated as unexplained income, and if Section 115BBE is applicable to the assessment period.
Sections Cited
147, 144, 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/250/2025-26/1082153486(1) dated 30.10.2025, 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. He is accordingly proceeded ex-parte.
Learned departmental representative vehemently argues during the course of hearing that both the lower authorities have rightly added the assessee’s cash deposits amounting to Rs.17,31,450/- as unexplained u/s 68 r.w.s. 115BBE of the Act
I have given my thoughtful consideration to the assessee’s and the Revenue’s respective vehement rival submissions. There is no issue between parties that the assessee/appellant is engaged in trading & supply of handloom(s) and textile in the name and style of M/s Seems Textiles at Panipat. He has further been found to be a regular return filer as tabulated at pages 5 to 6 of the lower appellate discussion. The necessary inference which would arise therefore in such a factual backdrop is that the impugned cash deposits; although not specifically reconciled or verified to the entire satisfaction of the learned lower authorities, represent his business turnover only whose credit could not be altogether denied as well. It is thus deemed appropriate that a further GP addition @8% thereupon in the given facts 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, 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