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Facts
The assessee's appeal arose from an order treating cash deposits of Rs. 150,06,200/- during demonetization as unexplained money. The lower authorities did not consider the assessee's business activity in money transfer services, despite the assessee providing detailed transaction records.
Held
The Tribunal held that while the assessee had not fully proved the source of all cash deposits, a lump sum addition of Rs. 5,00,000/- would be just and proper, not to be treated as a precedent. Additionally, the Tribunal directed the Assessing Officer to finalize the computation under normal provisions, not Section 115BBE, based on a High Court ruling.
Key Issues
Whether cash deposits made during demonetization are unexplained money, and whether Section 115BBE applies to transactions before April 1, 2017.
Sections Cited
143(3), 263, 69A, 115BBE
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Income Tax Appellate Tribunal, DELHI BENCH ‘B’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI MANISH AGARWAL
2017-18 arises against CIT(A)/ NFAC, Delhi’s order dated 22.08.2024 (DIN & Order No. ITBA/NFAC/S/250/2024-25/1067859891(1), in proceedings u/s 143(3) r.w.s. 263 of the Income-tax Act, 1961, hereinafter referred to as the ‘Act’.
Heard both the parties. Case file perused. sole substantive ground herein challenging both the learned lower authorities’ action treating his cash deposits during demonetization amounting to Rs.
150,06,200/- as unexplained money u/s 69A read with section 115BBE of the Act; in assessment order dated 23.03.2023 as upheld in the lower appellate discussion.
Both the parties reiterate their respective stands against and in support of the impugned addition made by both the learned lower authorities. It transpires from a perusal of the case records that neither the learned Assessing Officer nor the CIT(Appeals) has considered the assessee’s business activity running a retail management unit “RMU” engaged in money transfer services as authorized by M/s Oxygen Services India Pvt. Ltd. The assessee has filed the entire list of his corresponding transactions as well as the customers in detailed paper book running into 517 pages to this effect which has nowhere been specifically rebutted in both the lower proceedings. The fact also remains he has not been able to plead and prove the source of the impugned cash deposits to the entire satisfaction of the learned Assessing Officer as well as the CIT(A) herein. Be that as it may, we are of the considered view in this factual backdrop that a lump sum addition of Rs. 5,00,000/- only would be just and proper with a rider that the same shall not be treated as a precedent. We order accordingly. The assessee gets relief of Rs. 145,06,200/- in other words. could hardly dispute that hon’ble Madras high court in SMILE Microfinance Ltd. v. ACIT in WP(MD) No. 2078 of 2020 & 1742 of 2020 dated 19.11.2024 (Mad.) has already settled the issue that Section 115BBE applies on transactions on or after 01.04.2017 only. I, accordingly direct the Assessing Officer to finalize the consequential computation under normal provisions than u/s 115BBE of the Act in very terms. Ordered accordingly.
No other ground or argument has been pressed before us.
This assessee’s appeal is partly allowed.
Order pronounced in open court on 14.10.2025.