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Facts
The assessee's appeal for AY 2017-18 arises from an order involving proceedings under Section 144 of the Income Tax Act. The lower authorities treated cash deposits of Rs. 78 lakhs made during demonetization as unexplained money under Section 69A r.w.s. 115BBE.
Held
The Tribunal condoned the delay in filing the appeal. It acknowledged the assessee's argument regarding the rejection of explanations and the non-rejection of books of account. While acknowledging the possibility of cash turnover in the assessee's business, the Tribunal directed a lumpsum addition of Rs. 7 lakhs, considering it just and proper. For the assessment under Section 115BBE, the Tribunal noted that the provision came into effect on or after 01.04.2017 and directed assessment under normal provisions.
Key Issues
Whether cash deposits during demonetization can be treated as unexplained money without specific rejection of the assessee's books of account and explanation, and the applicability of Section 115BBE to transactions prior to 01.04.2017.
Sections Cited
144, 69A, 115BBE
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Income Tax Appellate Tribunal, DELHI BENCH: ‘G’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI NAVEEN CHANDRA
Assessment Year: 2017-18 Vs. Income Tax Officer, Mr. Mashood Uddin, Prop. M/s. Alpha Ward-1(1), International, State Bank Moradabad, Colony, Daulat Bagh, Uttar Pradesh Thana Naghphani, Moradabad PAN: ABDPU3502H (Appellant) (Respondent) Assessee by Sh. Aakash Ojha, Adv. Department by Sh. Manish Gupta, Sr. DR Date of hearing 03.11.2025 Date of pronouncement 03.11.2025 ORDER
PER SATBEER SINGH GODARA, JM
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/250/2023-24/1058138911(1), dated 22.11.2023 involving proceedings under section 144 of the Income- tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.
Delay of 412 days in filing of the assessee’s instant appeal is condoned in larger interest of justice and in light of Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC).
A perusal of the assessee’s instant appeal file indicates at the outset that he is aggrieved against both the learned lower authorities’ action treating his cash deposits during demonetization totalling to Rs.78 lakhs as unexplained money under section 69A r.w.s. 115BBE of the Act; in assessment order dated 29.11.2019 as upheld in the lower appellate discussion.
Learned counsel vehemently argues in this factual backdrop that both the lower authorities herein have erred in law and on facts in rejecting the assessee’s explanation for his impugned cash deposits despite the fact that he had filed all his cogent supportive documentary evidence during assessment. And that, the assessee’s books of account treating the impugned cash deposits as part of the business turnover have also not been specifically rejected as well. 5. Faced with this situation, the Revenue could hardly dispute that the assessee has been carrying out his business activity of export and local sales of handcraft items etc. We are of the 2 | P a g e considered view that possibility of assessee having cash turnover in such unorganized business activity could not be altogether ruled out as well despite the fact that he has not successfully discharged his onus of pleading and proving the impugned cash deposits as business receipts before the learned lower authorities. We deem it appropriate in these peculiar facts that a lumpsum addition of Rs.7 lakhs only would be just and proper with a rider that the same shall not treated as a precedent. The assessee gets relief of Rs.71 lakhs in other words.
So far as assessee’s assessment under section 115BBE is concerned, we 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.