GAURAV JAIN,DELHI vs. INCOME TAX OFFICER, WARD 58(8), DELHI

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ITA 6848/DEL/2025Status: DisposedITAT Delhi23 December 2025AY 2017-18Bench: Sh. Satbeer Singh Godara (Judicial Member)2 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal allowed a lump sum Gross Profit (GP) estimation of 5% on the cash deposits, considering the nature of the assessee's business in an unorganized sector. It further held that Section 115BBE is applicable only for transactions done on or after April 1, 2017, and directed the assessee to be assessed under normal provisions for the impugned period.

What were the facts?

The assessee, a wholesaler and retailer, made cash deposits of Rs. 29,22,000 during the demonetization period. The lower authorities treated these deposits as unexplained cash credits under Section 68 read with Section 115BBE of the Income Tax Act for Assessment Year 2017-18, which the assessee challenged.

What were the issues?

Whether cash deposits made during demonetization by a trader can be treated as unexplained cash credits, and the applicability of Section 115BBE to transactions prior to April 1, 2017.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 68,Section 115BBE

AI-generated summary — verify with the full judgment below

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

Before: Sh. Satbeer Singh Godara

Hearing: 23.12.2025Pronounced: 23.12.2025

Asstt. Year: 2017-18 Gaurav Jain, Vs Income Tax Officer, 40588, Jain Cloth Market, Shanti Ward-58(8), Mohalla, Gandhi Nagar, New Delhi-110002 Delhi-110092 (APPELLANT) (RESPONDENT) PAN No. AGSPJ4886D Assessee by: Sh. Rakesh Jain, Adv. Revenue by : Sh. Amit Shukla, Sr. DR Date of Hearing: 23.12.2025 Date of Pronouncement: 23.12.2025 ORDER This assessee’s appeal for Assessment Year 2017-18 arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2025-26/1080879089(1) dated 18.09.2025, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”).

2.

Heard both the parties at length. Case file perused.

3.

It emerges during the course of hearing that the assessee/appellant herein is aggrieved against both the learned lower authorities’ action treating his cash deposits during demonetization amounting to Rs.29,22,000/- as unexplained cash credits u/s 68 r.w.s. 115BBE of the Act, in assessment order dated 25.12.2019 as upheld in the lower appellate discussion.

Gaurav Jain 4. That being the case, the Revenue could hardly dispute that this assessee is a wholesaler and retailer in hosiery/fabric trading business wherein possibility of his cash sales in such an unorganized sector could not be altogether denied although he has fails to plead and prove all the relevant facts before both the learned lower authorities. It is thus deemed appropriate in the larger interest of justice that a lump sum GP estimation @ 5% qua the assessee’s cash deposits of Rs.29,22,000/- 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.

5.

So far as assessee’s assessment under Section 115BBE is concerned, I quote S.M.I.L.E Microfinance Limited Vs. The ACIT CC-1 in W.P.(MD) No.2078 of 2020 & W.M.P. (MD) No. 1742 of 2020 held that the said provision applied for transactions done on or after 01.04.2017 only. The assessee is accordingly directed to be assessed under normal provisions only.

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