Shalu Yadav Vs ITO (ITAT Delhi)
Patanjali Dealer Gets GP Estimation Relief: ITAT Delhi Curtails 69A Addition & Rejects 115BBE
The Delhi ITAT (SMC), in Shalu Yadav v. ITO (ITA No. 7973/Del/2025, AY 2017-18; order dated 24.12.2025), has partly allowed the Assessee’s appeal, substantially reducing the addition made on demonetisation cash deposits and holding that section 115BBE is inapplicable.
The Assessee, running a Patanjali retail dealership, had deposited ₹33.89 lakh in cash during the demonetisation period. The AO treated the entire amount as unexplained money u/s 69A and taxed it u/s 115BBE, which was affirmed by the NFAC.
The Tribunal observed that in an unorganised retail business, cash sales are a normal feature and cannot be ruled out altogether. At the same time, the Assessee failed to fully reconcile and substantiate the cash turnover before the lower authorities. Balancing these aspects, the ITAT held that estimating gross profit at 10% on the cash deposits—amounting to ₹3.39 lakh—would meet the ends of justice, with a clear caveat that the estimation shall not be treated as a precedent.
On the applicability of section 115BBE, the Tribunal followed the Madras High Court ruling in SMILE Microfinance Ltd. v. ACIT and held that 115BBE applies only to transactions on or after 01.04.2017. Accordingly, the AO was directed to compute income under normal provisions.
The appeal was thus partly allowed, granting substantial relief to the Assessee
FULL TEXT OF THE ORDER OF ITAT DELHI
