DCIT, NEW DELHI vs. M/S. JINDAL SAW LTD., NEW DELHI

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ITA 3016/DEL/2015Status: DisposedITAT Delhi07 May 2025AY 2007-08Bench: SHRI M. BALAGANESH (Accountant Member), SHRI YOGESH KUMAR U.S. (Judicial Member)4 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that neither party's arguments could be accepted in entirety. The assessees had not been able to specifically reconcile or verify the impugned cash deposits before the Assessing Officer, nor could the Revenue's contentions brush aside the assessees' detailed explanations. In the interest of justice, the Tribunal decided to make lump sum additions of Rs. 10 lakhs and Rs. 5 lakhs, appeal-wise, respectively, with a rider that these shall not be treated as a precedent. Regarding Section 115BBE, the Tribunal noted the Madras High Court's decision in SMILE Microfinance Ltd. v. ACIT, which held that Section 115BBE applies to transactions on or after 01.04.2017. The Assessing Officer was directed to ensure that the assessees are assessed under normal provisions for the reduced additions of Rs. 10 lakhs and Rs. 5 lakhs. No other ground or argument was raised.

What were the facts?

These are twin appeals filed by the Revenue (DCIT, Central Circle-20, New Delhi) against the orders of the CIT(A)-27, New Delhi, for Assessment Year 2019-20. The appeals challenge the deletion of additions made under Section 69A read with Section 115BBE of the Income-tax Act, 1961. The Assessing Officer had treated cash deposits of Rs. 3,55,38,000/- in the case of Resoursys Telecom and Rs. 1,46,02,000/- in the case of Raghav Bansal as unexplained money. The assessees are related parties, with one appearing to be a firm and the other its proprietor/managing partner. The Revenue contended that the assessees failed to prove the source of these cash deposits. The CIT(A) had accepted the assessees' explanation that these deposits represented business sales.

What were the issues?

1. Whether the Tribunal had to decide if the Revenue's sole substantive grievance, seeking to revive the assessment findings treating the twin assessees' respective cash deposits as unexplained money under Section 69A read with Section 115BBE of the Act, was valid. Assessee's contentions: - The CIT(A) had accepted their detailed explanation that the impugned cash additions represented their respective business sales in retail communication and related business activities. - They had filed all relevant details explaining the source of the impugned cash deposits to these regular business activities. - The Assessing Officer had not specifically rejected their books of accounts under Section 145(3) nor disturbed the relevant entries in the Profit and Loss account. Revenue's contentions: - The twin assessees could not plead and prove the source of the impugned cash deposits by filing corresponding supportive evidence and explanation. - The assessees' respective cash deposits of Rs. 3,55,38,000/- and Rs. 1,46,02,000/- were unexplained money.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE,Section 143(3),Section 145(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘A’ NEW DELHI

Before: SHRI SATBEER SINGH GODARA

For Appellant: Shri Pramod Jain, CA &, Shri Mukul Gupta, Adv
Hearing: 18.08.2025Pronounced: 18.08.2025

Heard together (2 matters)

ITA No. 3015/Del/2022
ITA No. 3016/Del/2022

Read from the judgment's own cause title. This page is filed under one of them.

O R D E R PER SATBEER SINGH GODARA, J.M:

2019-20 arise against Commissioner of Income-tax (Appeals)-27, New Delhi’s as many orders [CIT(A), Delhi-27/10120/2019-20 & CIT(A), Delhi-27/10119/2019- 20], both dated 18.10.2022, respectively, in proceedings u/s 143(3) of the Income- tax Act, 1961, hereinafter referred to as the ‘Act’.

Heard both the parties at length.

2.

A combined perusal of both case files reveals that the Revenue’s identical sole substantive grievance herein seeks to revive the assessment findings treating these twin assessee’s respective cash deposits of Rs. 3,55,38,000/- and Rs. 1,46,02,000/- as unexplained money u/s 69A read with Section 115BBE of the Act.

We are further informed that both these assessees are related parties wherein the former appears to be the firm and the latter individual assessee is its proprietor/ managing partner; as the case may be. The revenue vehemently argues in support of the foregoing identical addition that these twin assessees could not plead and prove the source of the impugned cash deposits by filing the corresponding supportive evidence and explanation in question.

3.

Learned counsel, on the other hand, invites our attention to the CIT(A)’s lower appellate discussion accepting these assessees’ detailed explanation that the above impugned cash addition in fact represent their twin respective business sales in retail communication and related business activities. Our attention is further relevant details, inter alia, explaining source of the impugned cash deposits to the above identical regular business activities only. They further submit that the Assessing Officer(s) had nowhere specifically rejected either the corresponding books of accounts u/s 145(3) of the Act nor ever disturbed the relevant entries in the P&L a/c in question.

4.

We have given our thoughtful consideration to the Revenue’s and the assessees’ foregoing submissions. We find no reason to accept either party’s arguments herein in entirety. This is for the precise reason that neither the assessees have been able to specifically get the impugned cash deposits reconciled/verified before the Assessing Officer nor the Revenue’s vehement contentions could brush aside the assessees’ corresponding detailed explanation(s).

Faced with this situation, we deem it appropriate, in the larger interest of justice, that lump sum additions of Rs. 10 lakhs and Rs. 5 lakhs appeal wise, respectively, shall be just and proper with a rider that the same shall not be treated as a precedent. Necessary computation shall follow.

5.

So far as the assessees’ assessment u/s 115BBE is concerned, the Revenue could hardly dispute that hon’ble Madras high court in SMILE Microfinance Ltd. v. ACIT in WP(MD) No. 2078 of 2020 & 1742 of 2020 dated 19.11.2024 (Mad.) has already settled the issue that Section 115BBE applies on transactions on or shall be assessed under normal provisions qua the above additions of Rs. 10 lakhs and Rs. 5 lakhs (supra), respectively.

No other ground or argument has been raised before us.

6.

These revenue’s appeals & 3016/Del/2022 are partly allowed. A copy of this common order be placed in respective case files.

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