SUNIL KUMAR YADAV,SHIKOHABAD vs. INCOME TAX OFFICER, FIROZABADI

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ITA 126/AGR/2022Status: DisposedITAT Agra10 February 2025AY 2017-183 pages
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What did the Tribunal hold?

The Tribunal held that the distinction made by the lower authorities between pre-demonetization and demonetization cash deposits is not sustainable in law. It directed the Assessing Officer to assess the assessee's entire deposits in the relevant previous year at a uniform rate of 8%, followed by the necessary computation. The Tribunal explicitly stated that this direction should not be treated as a precedent. Regarding the applicability of Section 115BBE, the Tribunal, relying on the Madras High Court's decision in S.M.I.L.E Microfinance Limited Vs. The ACIT CC-1, held that Section 115BBE applies only to transactions done on or after 01.04.2017. Therefore, it directed the Assessing Officer to assess the assessee's income under normal provisions, not under Section 115BBE.

What were the facts?

The assessee, Sunil Kumar Yadav, filed an appeal for Assessment Year 2017-18 against the order of the Commissioner of Income Tax(Appeals)/National Faceless Appeal Centre (NFAC). The proceedings were initiated under Section 144 of the Income-tax Act, 1961. The assessee did not appear before the Tribunal, and the case was proceeded ex-parte. The Revenue's representative submitted that the assessee made cash deposits totaling Rs. 6,34,17,251/- during the demonetization period. The lower authorities had assessed pre-demonetization deposits at 8% and treated demonetization deposits as unexplained under Section 69A read with Section 115BBE of the Act.

What were the issues?

1. Whether the distinction made by the lower authorities between pre-demonetization and demonetization cash deposits for assessment purposes is sustainable in law, considering the total cash deposits made by the assessee in the relevant previous year? 2. Whether Section 115BBE of the Income-tax Act, 1961, is applicable to cash deposits made during the demonetization period in the relevant previous year? Assessee's Contentions: None, as the assessee remained ex-parte. Revenue's Contentions: The learned Departmental Representative argued in support of the lower authorities' findings, contending that the addition of cash deposits made during demonetization should be upheld. The Revenue supported the distinction made between pre-demonetization and demonetization deposits.

Which sections of the Income-tax Act were involved?

Section 144,Section 69A,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “DB” BENCH, AGRA

Before: SHRI SATBEER SINGH GODARA & SHRI MANOJ KUMAR AGGARWAL

Hearing: 10.02.2025Pronounced: 10.02.2025

O R D E R PER SATBEER SINGH GODARA, JUDICIAL MEMBER:

This assessee’s appeal for assessment year 2017-18, arises against Commissioner of Income Tax(Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN & Order No. ITBA/NFAC/S/250/2022-23/1043082605(1), dated 19.05.2022, involving proceedings under Section 144 of the Income-tax Act, 1961, (hereinafter referred to as the ‘Act’). 2. Case called twice. None appears at the assessee’s behest. He is accordingly proceeded ex-parte.

Sunil Kumar Yadav Vs.ITO 3. It emerges during the course of hearing with the able assistance coming from the Revenue side that assessee had in fact made cash deposits during the demonetization period totaling to Rs.6,34,17,251/-in the relevant previous year wherein both the learned lower authorities have assessed pre-demonetization deposits @ 8% and those made during demonetization as stand treated as unexplained under section 69A r.w.s. 115BBE of the Act.

4. Learned departmental representative vehemently argues in support of both the lower authorities respective findings that impugned addition of cash deposits during demonetization herein deserves to be upheld. That being the case, we are of the considered view that the learned lower authorities impugned action distinguishing pre and during demonetization, is not sustainable in law. We thus direct the learned Assessing Officer to assess the assessee’s entire deposits in the relevant previous year, at a uniform rate of 8% followed by the necessary computation. Ordered accordingly. Not to be treated as a precedent.

4.

So far as the assessee’s assessment under Section 115BBE is concerned, we quote the hon’ble Madras high court’s decision in the case of 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. We direct the Learned Assessing Officer to assess the assessee’s income herein under normal provisions in very terms.

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