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Facts
The assessee's appeal for AY 2017-18 arose from an order treating cash deposits of Rs. 49,48,190/- as unexplained cash credits under Section 68 r.w.s. 115BBE of the Act. The assessee is engaged in the mustard oil wholesale and retail business.
Held
The Tribunal held that while the assessee had not satisfactorily discharged its onus to prove the source of cash deposits, a lump sum GP estimation of 5% for regular business sales would be just and proper, without setting a precedent. Regarding Section 115BBE, it was noted that it applies only to transactions on or after April 1, 2017.
Key Issues
Whether cash deposits during demonetization are unexplained cash credits, and the applicability of Section 115BBE on transactions.
Sections Cited
68, 115BBE, 143(3)
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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA
CIT(A), delhi-15/10607/2019-20 – DR No. 247/71], in proceedings u/s 143(3) of the Income-tax Act, 1961, hereinafter referred to as the ‘Act’.
Heard both the parties. Case file perused.
It transpires during the course of hearing that the assessee/appellant is aggrieved against both the learned lower authorities’ respective findings treating it’s cash deposits during demonetization amounting to Rs. 49,48,190/- as dated 23.12.2019 & upheld in the lower appellate discussion.
That being the case, this tribunal finds from a perusal of the case records that the assessee is engaged in mustard oil wholesale and retail business wherein possibility of predominant cash sales in such an unorganized edible oil sector could not be altogether ruled out. The fact also remains that the assessee has not satisfactorily discharged its onus to prove the source of the impugned cash deposits to the entire satisfaction of both the learned lower authorities. Be that as it may, it is thus deemed appropriate in the larger interest of justice that a lump sum GP estimation of 5% in such regular business sales in the assessee’s hands is deemed as just and proper with a rider that the same shall not be treated as a precedent.
Necessary computation shall follow as per law. Ordered accordingly.
So far as the assessee’s 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 after 01.04.2017 only. I, accordingly direct the Assessing Officer to finalize the consequential computation under normal provisions than u/s 115BBE of the Act in very terms. Ordered accordingly.
Order pronounced in open court on 24.12.2025.