DHRUV SINGHAL,EAST DELHI vs. ITO WARD 58(6), ITO , DELHI

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ITA 6384/DEL/2025Status: DisposedITAT Delhi25 November 2025AY 2017-183 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal estimated a lumpsum profit of 8% on the impugned cash deposits, stating it should not be treated as a precedent. The assessment under Section 115BBE was directed to be made under normal provisions as the relevant transactions were before April 1, 2017.

What were the facts?

The assessee made cash deposits of Rs. 24.80 lakhs during demonetization, which were considered unexplained by the lower authorities. The assessee claimed these deposits were from business turnover and previous withdrawals.

What were the issues?

Whether the cash deposits made during demonetization were unexplained and liable for assessment under Section 69A and 115BBE. Applicability of Section 115BBE to transactions prior to April 1, 2017.

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: “SMC” NEW DELHI

Before: SHRI SATBEER SINGH GODARA

Hearing: 25.11.2025Pronounced: 25.11.2025

Date of hearing 25.11.2025 Date of pronouncement 25.11.2025 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/250/2025-26/1079533095(1), dated 12.08.2025 involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Case called twice. None appears at the assessee’s behest. He is accordingly proceeded ex-parte.

2. The Revenue next vehemently submits that both the learned lower authorities’ respective findings in assessment order dated 06.12.2019 as well as in the lower appellate discussions have rightly held the assessee’s impugned cash deposits of Rs.24.80 lakhs made during demonetization; as unexplained under section 69A and liable to be assessed under section 115BBE of the Act.

2.

I have given my thoughtful consideration to the assessee’s and the Revenue’s vehement respective stands. It transpires during the course of hearing that there does not seem to be much a dispute about the assessee all along engaged in the business of trading BOPP and polyster films etc. This indeed coupled with the fact that he had filed his relevant supportive evidence as well explaining the impugned cash deposits as part of the sales turnover and previous withdrawals, which has not discharged his onus to the entire satisfaction of both the learned lower authorities. Faced with this situation and in the larger interest of justice, it is deemed appropriate that a lumpsum profit estimation of the assessee’s impugned cash deposits @ 8 % 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.

3.

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)

2 | P a g e 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.

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