Mashood Uddin Vs ITO (ITAT Delhi)
The appeal pertained to Assessment Year 2017-18 and involved cash deposits made during the 2016 demonetization. The Assessing Officer treated total deposits of Rs.78 lakhs as unexplained under Section 69A read with Section 115BBE, which was upheld by the CIT(A)/NFAC. The assessee contended that the deposits were legitimate business receipts from his export and local sales of handicraft items, submitting supporting documentary evidence and books of account, which were not explicitly rejected.
The ITAT observed that while the assessee did not fully discharge the burden of proving the deposits as business income, the nature of his unorganized business made substantial cash turnover plausible. Considering the facts, the Tribunal restricted the addition to Rs.7 lakhs, granting relief of Rs.71 lakhs, with a rider that the order should not be treated as precedent.
Regarding Section 115BBE, the Tribunal referred to the Madras High Court ruling in S.M.I.L.E. Microfinance Ltd., noting that the enhanced tax rate applies prospectively from 01.04.2017. Consequently, the assessee was directed to be assessed under normal provisions. The appeal was therefore partly allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
This assessee’s appeal for assessment year 2017-18, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2023-24/1058138911(1), dated 22.11.2023 involving proceedings under section 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
