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Facts
The assessee, Amir Traders, filed its return of income for AY 2017-18 declaring Rs.2,25,560/-. The Assessing Officer (AO) made additions of Rs.11,67,182/- due to a difference in Gross Profit (GP) rate and Rs.62,60,000/- for cash deposits during the demonetization period, taxing both under section 115BBE of the Income Tax Act. The CIT(A) upheld these additions, leading the assessee to appeal to the ITAT.
Held
The Tribunal deleted the GP addition of Rs.11,67,182/-, finding no defects in the books of account or invocation of Section 145(3) by the AO. Regarding the cash deposits, the Tribunal partially allowed the appeal by accepting Rs.16,42,000/- as legitimate cash sales (deposited within the first two weeks of demonetization) but upheld the addition of the remaining Rs.46,18,000/- as unexplained money. The Tribunal also ruled that Section 115BBE, enacted on 15.12.2016, is not retrospectively applicable for AY 2017-18, directing the AO to tax the upheld addition at normal rates.
Key Issues
The key issues were the validity of the addition for fall in Gross Profit rate, the nature and source of cash deposits made during the demonetization period, and the retrospective applicability of Section 115BBE of the Income Tax Act for AY 2017-18.
Sections Cited
Section 250, Section 143(2), Section 142(1), Section 143(3), Section 115BBE, Section 145(3), Section 69A, Rule 34 of ITAT Rules, 1963
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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: SHRI T. R. SENTHIL KUMAR & SHRI BIJAYANANDA PRUSETH
This appeal by the assessee emanates from the order passed under section 250 of the Act (in short, 'the Act') by the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [in short, “CIT(A)