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Facts
The assessee's appeal for AY 2017-18 concerned cash deposits of Rs. 17,21,000/- during demonetization, which were treated as unexplained by lower authorities, with the CIT(A) restricting the addition to Rs. 5,00,000/-. Although the assessee had proven cash withdrawals exceeding Rs. 25,00,000/- before re-deposits, a full cash flow statement for the intervening period was not provided.
Held
The Tribunal deemed a lump sum addition of Rs. 1,00,000/- as just and proper, providing the assessee a further relief of Rs. 4,00,000/-. It clarified that Section 115BBE is applicable only for transactions on or after 01.04.2017 and directed the assessee to be assessed under normal provisions.
Key Issues
Whether cash deposits during demonetization were unexplained; and the applicability of Section 115BBE of the Income Tax Act, 1961.
Sections Cited
143(3), 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. Satbeer Singh Godara
ORDER This assessee’s appeal for Assessment Year 2017-18 arises against the Addl./JCIT(A), Panchkula’s DIN & order No. ITBA/APL/S/250/2025-26/10881941757(1) dated 23.10.2025, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
It emerges during the course of hearing that both the learned lower authorities have treated the assessee’s cash deposits during demonetization of Rs.17,21,000/- as unexplained in assessment order dated 19.12.2019 which has been restricted to Rs.5,00,000/- only in the lower appellate discussion.
Manju Gupta 4. Faced with this situation, the Revenue could hardly dispute that going by the learned CIT(A)’s detailed discussion in paras 6.1 & 6.2 at page 15, the assessee had already proved cash withdrawals of more than Rs.25,00,000/- followed by re- deposits thereof on 21.11.2016 forming subject matter of adjudication before the tribunal. The fact however remains that the assessee has not pleaded and prove the corresponding cash flow statement of the entire intervening period as well. It is thus deemed appropriate in these peculiar facts that a lump sum addition of Rs.1,00,000/- only would be just and proper with a rider that the same shall not be treated as a precedent. The assessee gets relief of Rs.4,00,000/- in other words.
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.