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Facts
The assessee's appeal concerned cash deposits made during demonetization, treated as unexplained money under Section 69A read with Section 115BBE. The assessee operated a "Patanjali" dealership.
Held
The Tribunal acknowledged that cash sales in such businesses cannot be ruled out but noted the assessee's failure to provide satisfactory reconciliation. Consequently, a lump sum GP estimation of 10% on the impugned cash deposits was deemed appropriate.
Key Issues
Whether cash deposits during demonetization are unexplained money, and the applicability of Section 115BBE on transactions.
Sections Cited
143(3), 69A, 115BBE
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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA
O R D E R
PER SATBEER SINGH GODARA, JM:
This assessee’s appeal 2017-18 arises against CIT(A)/ NFAC, Delhi’s order dated 16.09.2025 (DIN & Order No. ITBA/NFAC/S/250/2025-26/1080773758(1), 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.
Learned counsel appearing for the assessee vehemently argues during the course of hearing that both the learned lower authorities have erred in law and on facts in treating the assessee’s cash deposits during demonetization amounting to assessment order dated 24.12.2019 & upheld in the lower appellate discussion.
The assessee’s case is that her regular business activity of running a “Patanjali” dealership is not in dispute in principle. That being the case, this tribunal is of the considered view that cash sales in such unorganized retail business activities cannot be altogether ruled out. The fact also remains that the assessee has not satisfactorily discharged her onus of proving the necessary reconciliation and verification of the corresponding turnover of cash sales before the learned lower authorities. It is thus deemed appropriate in the larger interest of justice that a lump sum GP estimation @ 10% of the impugned cash deposits; coming to Rs. 3,39,000/- is deemed as just and proper with the 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 very terms. Ordered accordingly.
Order pronounced in open court on 24.12.2025.