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Facts
The assessee's appeal for AY 2017-18 arose from an order confirming an addition of Rs. 24,02,750/- made during demonetization as unexplained income under Section 115BBE. The assessee's business sales were accepted, but this cash deposit was treated as unexplained.
Held
The Tribunal noted that while the Revenue's addition was not fully justifiable given the accepted business sales, the assessee also failed to prove all facts before lower authorities. Therefore, a lump sum addition of Rs. 2.5 lacs was considered appropriate and not to be treated as a precedent.
Key Issues
Whether cash deposits during demonetization, despite accepted business sales, can be added as unexplained income under Section 115BBE, and if so, to what extent.
Sections Cited
143(3), 69A, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. Satbeer Singh Godara
This assessee’s appeal for Assessment Year 2017-18, arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2024-25/1076424524(1)dated 23.05.2025, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”).
2 5105/Del/2025 Raman Gulati
Heard both the parties at length. Case file perused.
It emerges during the course of hearing that both the lower authorities have treated the assessee’s cash deposited during demonetization period amounting to Rs.24,02,750/-; as unexplained u/s.69A r.w.s. 115BBE of the Act; in assessment order dated 20.12.2019 as upheld in the lower appellate discussion.
The tribunal hereby notices in this factual matrix that the assessee is carrying on his business activity in the name and style of M/s. G.K. Handlooom and R.K. Handlooms. And also that he had made cash deposits of Rs.18397849/- in the relevant financial year excluding demonization which stands accepted as it’s genuineness is not in dispute. This being the clinching factual position, the Revenue’s stand making the impugned addition of Rs.24,02,750/- in entirety hardly deserves to be concurred with. The fact however remains that assessee has failed to plead and prove all the relevant facts and his business sales before the learned lower authorities. It is thus deemed appropriate in the larger interest of justice that a lump sum addition of Rs.2.5 lacs only would be just and proper with a rider that the same shall not be treated as a precedent. Necessary computation shall follow as per law. 5. 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. 3 5105/Del/2025 Raman Gulati 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. 6. This assessee’s appeal is partly allowed. Order Pronounced in the Open Court on 24/09/2025.