ANITA GORVER ,DELHI vs. ITO WARD-43 (7) , NEW DELHI

ORDER This appeal by the assessee is emanating from the order of the NFAC, Delhi in Appeal No. ITBA/NFAC/S/250/2025-26/1079951017(1), order dated 25.08.2025 relevant to assessment year 2017-18 on the following grounds:-

1. On the facts and in the circumstances of the case and in law, NFAC erred in confirming addition in respect of cash deposits aggregating Rs. 34,03,000/- made by the assessee, holding them to be unexplained.

2. On the facts and in the circumstances of the case and in law, NFAC erred in upholding applicability of section 115BBE to the addition as made in assessment.

2. None appeared on behalf of the assessee.

3. After hearing the Ld. DR and perusing the records, I find that in this case returned income declaring of Rs. 7,61,970/- was filed electronically on 19.7.2017 for AY 2017-18. The case was selected for E-scrutiny under (CASS) for limited scrutiny with following reasons:-

1. 1. Large value cash deposits during demonetization period.

2. Large value cash deposits during demonetization period as compared to returned income.

4. After perusing the return of income, AO noted that assessee had deposited huge cash of Rs. 34,03,000/- in his bank account during the demonetization period. AO noted that assessee has failed to submit admissible documentary evidence in support of her claim also. However, the assessee contended that the said deposits were out of earlier cash withdrawals aggregating Rs. 23.5 lacs and Rs. 20.10 lacs received in cash in 2012 towards part consideration for a property transaction. Hence, he observed that entire cash deposited into assessee’s bank account during the demonetization period i.e. Rs. 34,03,000/- and added the same to the returned income of the assessee as unexplained cash credit u/s 68 of the Act and taxed u/s. 115BBE of the Act @60%. In appeal, assessee has submitted the following submissions: i) The assessee claimed to have received Rs. 20.10 lakhs in cash in 2012 under an agreement to sell a commercial property. However, there is no corroborative proof of actual receipt of cash other than an affidavit, which by itself, without any independent verification or cross examination, cannot be treated as conclusive evidence. The transaction remains unregistered, was followed by litigation, and the consideration itself was under dispute. ii) The assessee also claimed to have withdrawn Rs. 23.5 lacs. In cash between AY 2012-13 and AY 2016-17. However, no plausible reason was provided for continuous withdrawals if large sums were already held in cash. Further, there is no evidence that the cash so withdrawn was not spent in the intervening period. In Sumati Dayal vs. CIT (1995) 214 ITR 801 (SC), the Hon’ble Supreme Court has clearly held 2 | P a g e that when there are surrounding circumstances, human probabilities, and conduct of the assessee which cast doubt on the claim, the same must be rejected.

5. However, Ld. CIT(A) did not consider the aforesaid explanation of the assessee properly, and confirmed the addition made by the AO. Therefore, in view of the factual matrix, as aforesaid and in the interest of justice, I remit back the issues in dispute to the file of the Ld. CIT(A) with the directions to decide the issues in dispute afresh, after giving adequate opportunity of being heard to the assessee and consider & examine the aforesaid explanations of the assesse alongwith all the relevant documents and evidences filed by the assessee. Ld. CIT(A) is further directed to consider the decision of the Hon’ble Madras High Court in SMILE Microfinance Ltd. vs. ACIT in WP(MD) no. 2078 of 2020 & 1742 of 2020 dated 19.11.2024 (Mad.) with respect to assessment u/s. 115 BBE of the Act. Assessee is also directed to produce all the necessary documents before the Ld. CIT(A) and fully cooperate with him during the proceedings.