Satish Kumar Malik Vs ITO (ITAT Delhi)
Demonetisation Cash Deposits Largely Accepted: ITAT Restricts Addition to ₹2 Lakh and Bars Section 115BBE
The Delhi ITAT partly allowed the assessee’s appeal in a demonetisation cash deposit case by substantially deleting the addition of ₹44.44 lakh made under Section 68 and holding that the harsh provisions of Section 115BBE were not applicable for AY 2017-18. The assessee, a trader, had explained that the deposits represented cash sales made prior to 08.11.2016 and available cash in hand duly recorded in audited books of account, which were neither rejected nor found defective.
The Tribunal noted that the Assessing Officer had accepted the business activity and trading results and had not invoked Section 145(3). Since the cash deposits were linked to recorded sales and cash balances, only a token addition of ₹2 lakh was sustained to meet the ends of justice, instead of taxing the entire deposits. On the rate of tax, relying on the Madras High Court decision in S.M.I.L.E. Microfinance Ltd., the Tribunal held that Section 115BBE is applicable only from AY 2018-19 onwards and therefore could not be invoked for AY 2017-18. Consequently, most of the addition was deleted and the balance was directed to be taxed at normal rates. The appeal was thus partly allowed with substantial relief to the assessee.
FULL TEXT OF THE ORDER OF ITAT DELHI
