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Facts
The assessee's appeal for AY 2017-18 arises from an order involving proceedings under Section 143(3) of the Income-tax Act. The lower authorities treated cash deposits during demonetization amounting to Rs. 44.48 lakhs as unexplained and liable for assessment at a higher rate under Section 115BBE.
Held
The Tribunal acknowledged that the assessee had submitted its cash flow statement and evidence but held that the onus of proof was not satisfactorily discharged. Considering the possibility of cash withdrawals and sales in the regular business activity, the Tribunal deemed it appropriate to make a lumpsum addition of Rs. 2 lakhs.
Key Issues
Whether the cash deposits during demonetization are unexplained and liable to be assessed under Section 115BBE, and whether Section 115BBE is applicable to transactions before 01.04.2017.
Sections Cited
143(3), 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH: “SMC” NEW DELHI
Before: SHRI SATBEER SINGH GODARA
Date of hearing 24.11.2025 Date of pronouncement 24.11.2025 ORDER This assessee’s appeal for assessment year 2017-18, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2025-26/1079335969(1), dated 06.08.2025 involving proceedings under section 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 with the able assistance coming from both the parties that the learned lower ITA No.5809/Del./2025 authorities have treated the assessee’s cash deposits during demonization amounting to Rs.44.48 lakhs as unexplained, and, therefore, liable to be assessed at the higher rate under section 115BBE of the Act, in assessment order dated 26.12.2019 and upheld in the lower appellate discussion.
I have given my thoughtful consideration to the assessee’s and the Revenue’s respective vehement submissions. There is hardly any dispute between the parties that not only the assessee has proved itself as carrying printing business but also it had all along submitted its cash flow statement indicating cash balance amounting to Rs.62,96,399/- as on 1st November, 2016. It is made clear that although the assessee had filed all of its relevant evidence, it appears to have not satisfactorily discharged its onus in proving the same either in assessment or in the lower appellate discussion. Be that as it may, the tribunal is of the considered view that possibility of such cash withdrawals as well as cash sales in the regular business activity could not be simply brushed aside. It is thus deemed appropriate in the larger interest of justice that a lumpsum addition of Rs. 2 lakhs only in the given facts would be suffice in the assessee’s case with a rider that the same shall not 2 | P a g e ITA No.5809/Del./2025 be treated as a precedent. The assessee gets relief of Rs.42.48 lakhs in other words. Necessary computation shall follow as per law.
So far as assessee’s assessment under section 115BBE is concerned, I quote S.M.I.L.E. Microfinance Ltd. Vs. ACIT, W.P. (MD) No.2078 of 2020 & 1742 of 2020, dated 19.11.2024 (Madras) that the impugned statutory provision would come into effect on the transaction done on or after 01.04.2017 only. The assessee is accordingly directed to be assessed under the normal provision as per law.