POOJA MEHTA ,DELHI vs. ITO WARD-51(2), DELHI

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ITA 4819/DEL/2025Status: DisposedITAT Delhi29 September 2025AY 2017-18Bench: SHRI SATBEER SINGH GODARA (Judicial Member)3 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that while the possibility of cash transactions could not be ruled out, the assessee had not successfully reconciled all relevant facts. It was deemed appropriate to make a lump sum addition of Rs. 3.5 lakhs representing the gross profit component, which would not be treated as a precedent. The Tribunal also directed the Assessing Officer to finalize computation under normal provisions instead of Section 115BBE, as the section applies to transactions on or after 01.04.2017.

What were the facts?

The assessee's appeal arises from an order upholding the addition of Rs. 34.50 lakh as unexplained cash deposit during demonetization. The assessee was engaged in the business of school uniforms, and the lower authorities treated the cash deposit as unexplained income.

What were the issues?

Whether the cash deposit during demonetization is unexplained and taxable under Section 115BBE? Whether Section 115BBE applies to transactions prior to 01.04.2017?

Which sections of the Income-tax Act were involved?

Section 143(3),Section 68,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’ NEW DELHI

Before: SHRI SATBEER SINGH GODARA

For Appellant: Shri S. Krishnan, Adv
For Respondent: Shri Manoj Kumar, Sr. DR
Hearing: 22.09.2025Pronounced: 22.09.2025

2017-18 arises against CIT(A)/ NFAC, Delhi’s order dated 16.07.2025 (DIN & Order No. ITBA/NFAC/S/250/2025-26/107855087(1), in proceedings u/s 143(3) of the Income-tax Act, 1961, hereinafter referred to as the ‘Act’.

Heard both the parties. Case file perused. aggrieved against both the learned lower authorities’ action treating her cash deposit during demonetization of Rs. 34.50 lakh as unexplained u/s 68 read with section 115BBE of the Act in assessment order dated 28.12.2019 and upheld in the lower appellate discussion.

3.

I have given my thoughtful consideration to the assessee’s and the Revenue’s vehement arguments against and in support of the impugned addition.

The assessee all along has been admittedly held as engaged in the business of school uniforms etc., wherein possibility of cash transaction or cash in hand; as the case may be, could not be altogether ruled out. Learned counsel could further not dispute that she has not successfully reconciled or verified all the relevant facts before both the lower authorities. Be that as it may, it is thus deemed appropriate that a lump sum addition of Rs. 3.5 lakhs only would be just and proper representing the alleged gross profit component in the assessee’s foregoing business with a rider that the same shall not be treated as a precedent. Necessary computation shall follow as per law.

4.

So far as the assessee’s assessment u/s 115BBE is concerned, the revenue 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.) 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.

5.

This assessee’s appeal is allowed.

Order pronounced in open court on 22.09.2025.

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