SWARNALATA MADUGULA,DELHI vs. INCOME TAX OFFICER, NEW DELHI
आयकर अपीलीय अिधकरण
िदʟी पीठ “एस एम सी”, िदʟी
ŵी िवकास अव̾थी, Ɋाियक सद˟
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH “SMC”, DELHI
BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER
आअसं.2584/िदʟी/2025 (िन.व. 2017-18)
Swarnalata Madugula,
Anil gupta & CO. S-39, Green Park,
Main Market, New Delhi 110016
...... अपीलाथᱮ/Appellant
PAN: BIEPS-1107-D
बनाम Vs.
Income Tax Officer, Ward-29(1),
Civic Centre, New Delhi, 110002
..... ᮧितवादी/Respondent
अपीलाथŎ Ȫारा/Appellant by : Ms. Himanshi Goel, Advocate &
Shri Anil Goel, Chartered Accountant
ŮितवादीȪारा/Respondent by : Ms. Sudha Gupta, Sr. DR
सुनवाई कᳱ ितिथ/ Date of hearing
:
30/07/2025
घोषणा कᳱ ितिथ/ Date of pronouncement :
:
27/10/2025
आदेश/ORDER
PER VIKAS AWASTHY, JM:
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’] dated 22.02.2025, for Assessment Year 2017-18. 2. In appeal, the assessee has assailed the addition of Rs.25,00,000/- u/s.69A r.w.s. 115BBE of the Income Tax Act,1961(hereinafter referred to as ‘the Act’) confirmed by the CIT(A).
3. Ms. Himanshi Goel, appearing on behalf of the assessee submits that the Assessing Officer (AO) made addition of Rs.25,00,000/- on account of cash deposits in (old currency) in the bank account during the period of 2
demonetization. She submitted that during the course of assessment proceedings and First Appellate proceedings it was explained that the cash deposits are from earlier withdrawals from the bank. The assessee had withdrawn more than Rs.30,00,000/- from the bank. The unutilized amount was immediately deposited by the assessee after declaration of demonetization of Rs.1,000/- and Rs.500/- currency notes, relevant documentary evidences were also provided to the AO.
The AO made addition without providing any opportunity of hearing or raising any queries for seeking further clarification from the assessee. The assessee filed appeal before the CIT(A). The CIT(A) sought remand report from the AO on the submissions made by the assessee. The AO furnished remand report dated
08.10.2024, rejecting assessee’s explanation with regard to source of cash deposits. The CIT(A) without giving further opportunity to the assessee to file reply to the remand report, confirmed the addition made by AO. Hence, the present appeal.
4. The ld. Counsel submits that in the remand report, the AO has not controverted the fact that the assessee had withdrawn cash from the bank aggregating to Rs.30,00,000/-. The AO merely raised a query i.e. purpose of withdrawal of cash. The AO rejected assessee’s explanation for the reason that the purpose of withdrawal was not made clear by the assessee. Since, the assessee has been able to explain the source of cash deposits, the AO could not have travelled beyond a point to question the purpose of withdrawal. Thus, she prayed for reversing finding of the CIT(A) and deleting addition made by the AO.
4.1. The ld. Counsel further pointed that the AO while making addition has invoked the provisions of section 115BBE of the Act and has charged tax @60%.
She asserted that the provisions of section 115BBE of the Act are w.e.f.
3
01.04.2017. The amended provisions would apply to the assessment year 2018-
19 and onward. In support of his submissions, the ld. Counsel placed reliance on the decision of Hon’ble Madras High Court in the case of SMILE Microfinance Ltd.
vs. ACIT, WP (MD) No.2078 of 2022 decided on 19.11.2024 .
5. Per contra, Ms. Sudha Gupta representing the department vehemently defended the impugned order and prayed for dismissing appeal of the assessee.
6. Both sides heard. The solitary issue in present appeal is addition of Rs.
25,00,000/- on account unexplained cash deposit during demonetization period.
The case of the assessee is that cash deposit of Rs.25,00,000/- is from earlier withdrawals. The assessee has furnished the details of withdrawals from her ICICI
Bank account as under:
Date
Amount Withdrawal
04.09.2015
6,00,000/-
07.09.2015
7,00,000/-
08.09.2015
7,00,000/-
21.06.2016
5,00,000/-
29.06.2016
5,00,000/-
Total
30,00,000/-
08.11.2016
Demonetization
09.11.2016
25,00,000/- (Deposited)
A perusal of the table revels that there are withdrawals of Rs.10,00,000/- in the month June 2016 on two occasions Rs.5,00,000/- were withdrawn on 21.06.2016 and equal amount was withdrawn on 29.06.2016. The withdrawal of Rs.20,00,000/- in three trenches of Rs.6,00,000/-, Rs.7,00,000/ & Rs.7,00,000/- was in the month of September 2015. The assessee has deposited Rs.25,00,000/- in single installment on 09.11.2016. Keeping in view proximity of cash withdrawals and cash deposits in the Bank account, explanation furnished by the 4
assessee can at best be accepted to the extent of deposits from bank withdrawals in the of month June 2016 i.e. Rs.10,00,000/-. As regards, withdrawals to the extent of Rs.20,00,000/- in the month of September 2015, the same amount being held for more than a year to be re-deposited again in November 2016 is beyond comprehension. No plausible reason has been given by the assessee for withholding the money in cash for such a long time. Hence, the addition made on account of cash deposits to the extent of Rs.10,00,000/- is deleted. The remaining amount of Rs.15,00,000/- is confirmed.
7. It is further assailed that the Assessing Officer has invoked the provisions of section 115BBE of the Act and has charged interest @60%. The Hon’ble Madras
High Court in the case of SMILE Microfinance Ltd. vs. ACIT, WP (MD) No.2078 of 2022 decided on 19.11.2024 has held that amendment to section 115BBE of the Act would come into effect from 01.04.2017 i.e. relevant to AY 2018-19 onwards.
Thus, in the impugned assessment year un-amended provisions of section 115BBE of the Act would apply.
8. In the result, appeal of the assessee is partly allowed.
Order pronounced in the open court on Monday the 27th day of October,
2025. (VIKAS AWASTHY)
᭠याियक सद᭭य/JUDICIAL MEMBER
िदʟी/Delhi, ᳰदनांक/Dated 27/10/2025
NV/-
5
ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to :
1. अपीलाथᱮ/The Appellant ,
2. ᮧितवादी/ The Respondent.
3. The PCIT/CIT(A)
4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी
5. गाडᭅ फाइल/Guard file.
BY ORDER,
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(Asstt.