SUVIDHI INTERNATIONAL PRIVATE LIMITED,DELHI vs. ITO WARD 24(4), DELHI

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ITA 5116/DEL/2025Status: DisposedITAT Delhi24 September 2025AY 2017-18Bench: Sh. Satbeer Singh Godara (Judicial Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal noted that while cash transactions are common in the scrap business, the assessee failed to reconcile its business turnover with the cash deposits. Therefore, a lump sum addition of Rs. 3 lacs was deemed just and proper, providing significant relief to the assessee.

What were the facts?

The assessee's appeal for AY 2017-18 arose against the lower authorities' action of treating cash deposits of Rs. 32,97,896 during demonetization as unexplained cash credits. The assessee is engaged in the scrap business, dealing with cash sales and purchases.

What were the issues?

Whether cash deposits during demonetization, in the context of a scrap business, can be treated as unexplained cash credits, and if so, to what extent addition should be made.

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: Sh. Satbeer Singh Godara

Hearing: 24.09.2025Pronounced: 24.09.2025

ORDER This assessee’s appeal for Assessment Year 2017-18, arises against the NFAC, Delhi DIN & order No. ITBA/NFAC/S/250/2025-26/107414495(1) dated 23.06.2025, in proceedings u/s 143(3) r.w.s. of the Income Tax Act, 1961 (in short “the Act”). 2. Heard both the parties at length. Case file perused.

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3.

It emerges during the course of hearing that the assessee / appellant herein is aggrieved against both the lower authorities action treating his cash deposits during demonetization amounting to Rs.32,97,896/- as unexplained cash credits u/s. 68 of the Act, in assessment order dated 26.12.2019 as upheld in the lower appellate discussion.

4.

The tribunal hereby notices in this factual backdrop that even the lower authorities are fair enough in not disputing the clinching facts that the assessee/ a company, is engaged in scarp business; including Ferrous and Non-Ferrous metals, wherein cash sale and purchases in such an un-organized sector could not be all together ruled out. The fact however remains that the assessee has not been able to plead and prove all the relevant facts reconciling its business turnover and cash deposit in both the lower proceedings. It is thus deemed appropriate in the larger interest of justice that a lump sum addition of Rs.3 lacs only would be just and proper with a rider that the same shall not be treated as a precedent. The assessee gets relief of Rs. 29,97,896/- lacs in very terms. 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. 1742 of 2020 held that the said provision applied for transactions done on or after 01.04.2017 only. The assessee

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