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Facts
The Revenue filed an appeal against the deletion of an addition made by the Assessing Officer, who had treated cash deposits of Rs. 1,76,55,000/- during demonetization as unexplained. The assessee is a retailer of liquor and wine business.
Held
The Tribunal noted that while the assessee could not fully reconcile the cash deposits, a lumpsum addition of Rs. 6 lakhs would be just and proper, with the rider that it should not be treated as a precedent. For assessment under section 115BBE, the Tribunal directed assessment under normal provisions as the said section applies only from 01.04.2017.
Key Issues
Whether the entire cash deposits during demonetization were unexplained, and whether Section 115BBE of the Income-tax Act is applicable to the assessment year in question.
Sections Cited
143(3), 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH: ‘E’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA
ORDER
PER SATBEER SINGH GODARA, JM
This Revenue’s appeal for assessment year 2017-18, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2024-25/1067072111(1), dated 26.07.2024 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.
Delay of 2 days in filing of the assessee’s/Revenue’s instant appeal is condoned in larger interest of justice and in light of Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC).
Coming to the Revenue’s sole substantive grievance based on the instant appeal i.e. CIT(A)/NFAC has erred in law and on facts in reversing the Assessing Officer’s action treating the assessee’s cash deposits during demonetization amounting to Rs. 1,76,55,000/- as unexplained.
The Revenue vehemently argues during the course of hearing that the Assessing Officer’s assessment dated 28.12.2019 framed in the assessee’s case had rightly treated his cash deposits during demonetization amounting to Rs.1,76,55,000/- which has been wrongly deleted in the lower appellate discussion.
Both the learned representatives vehemently reiterate the Revenue’s and the assessee’s respective stands in support and against the impugned cash deposit addition. There does not seem to be much a dispute between the parties that this assessee/individual is a retailor of liquor and wine business who
2 | P a g e run his outlets in Punjab and Rajasthan. He has further declared sales turnover of Rs.20,20,47,407/- even as per the assessment order as well.
That being the case, it could safely be presumed that although the assessee/respondent could not reconcile and verify his impugned cash deposits as part of the liquor sales turnover to the satisfaction of the Assessing Officer, the same could be termed as the sole reason for rejecting his entire explanation as well. We thus deem it appropriate in this factual backdrop that a lumpsum addition of Rs.6 lakhs only 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 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 accordingly directed to be assessed under the normal provision as per law.
This Revenue’s appeal is partly allowed.