Loading judgment…
Facts
The assessee's appeal for AY 2017-18 concerns cash deposits of Rs.16.99 lacs during demonetization, which were treated as unexplained by lower authorities under Section 69A r.w.s. 115BBE. The assessee is engaged in sale and trading of appliances, with a possibility of cash sales and turnover.
Held
The Tribunal held that the assessee is engaged in business with potential cash sales. A Gross Profit component of 10% on the impugned cash deposits was deemed appropriate but not to be treated as a precedent. For assessment under Section 115BBE, it was clarified that it applies only to transactions on or after 01.04.2017.
Key Issues
Whether cash deposits during demonetization can be treated as unexplained income, and the applicability of Section 115BBE for transactions before 01.04.2017.
Sections Cited
147, 144, 69A, 115BBE, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. Satbeer Singh Godara
ORDER This assessee’s appeal for Assessment Year 2017-18, arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2025-26//1076906863(1) dated 11.06.2025, in proceedings u/s 147 r.w.s. 144 of the Income Tax Act, 1961 (in short “the Act”).
2 4879/Del/2025 Neelam Gupta
Heard both the parties at length. Case file perused.
It emerges during the course of hearing that the assessee/ appellant is aggrieved against both the learned lower authorities respective findings treating his cash deposits during demonetization amounting to Rs.16.99 lac as unexplained u/s. 69A r.w.s. 115BBE of the Act, in assessment order framed on 07.05.2023 and upheld in the lower appellate discussion.
It is evident from the case records that the assessee is admittedly engaged in sale and trading of inventors and other similar appliances as per the return submitted on record wherein possibility of cash sales and turnover; although not entirely before learned lower authorities, could not be ruled out as well. It is thus appropriate in these peculiar facts that GP component @ 10% of the impugned cash deposits of Rs.16.99 lacs would be just and proper with a rider that the same shall not be treated as a precedent. Ordered accordingly.
3 4879/Del/2025 Neelam Gupta
So far as assessee’s assessment under Section 115BBE is concerned, I quote S.M.I.L.E Microfinance Limited Vs. The ACIT CC-1 in W.P.(MD) No.2078 of 2020 & W.M.P. (MD) No. 1742 of 2020 held that the said provision applied for transactions done on or after 01.04.2017 only. The assessee is accordingly directed to be assessed under normal provisions only.
This assessee’s appeal is partly allowed.
Order Pronounced in the Open Court on 24/09/2025.