Case Law Details
Anil Madaan Vs ITO (ITAT Delhi)
The appeal arose from an assessment order passed under Section 143(3) of the Income-tax Act, 1961 for Assessment Year 2017-18, in which cash deposits of ₹35,66,768 made during the demonetisation period were treated as unexplained cash credits under Section 68. The addition was upheld by the CIT(A)/NFAC, leading to the present appeal before the ITAT Delhi.
The Tribunal noted that there was no dispute that the assessee was engaged in the business of purchase and sale of footwear, an unorganised sector in which the possibility of cash turnover could not be ruled out. It further observed that the assessee had consistently furnished relevant details relating to its business turnover during the demonetisation period. At the same time, the Tribunal recorded that the assessee had not fully discharged the burden of explaining and proving its case in respect of the cash deposits.
Considering the overall factual background, the Tribunal held that sustaining the entire addition was not justified. It considered a lump sum addition of ₹2,00,000 to be just and proper, while specifically directing that the order should not be treated as a precedent. Consequently, the assessee was granted relief of ₹33,66,768, with necessary computation to be carried out in accordance with law.
On the issue of assessment under Section 115BBE, the Tribunal relied on the decision in S.M.I.L.E. Microfinance Ltd. Vs. ACIT and observed that the relevant statutory provision would apply only to transactions undertaken on or after 01.04.2017. It accordingly directed that the assessee be assessed under the normal provisions of the Act instead of Section 115BBE.
The appeal was 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/250/2025-26/1085988931(1), dated 13.02.2026 involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
Heard both the parties. Case file perused.
2. Coming to the assessee’s sole substantive ground raised herein, I notice that it seeks to reverse both the learned lower authorities’ respective findings assessing its cash deposits during demonetization period amounting to Rs.35,66,768/- as unexplained under section 68 of the Act; in assessment order dated 21.05.2019 as upheld in the lower appellate discussion.
3. I have given my thoughtful consideration to the assessee’s and the Revenue’s respective vehement submissions. I wish to make it clear that there has been no dispute all along that the assessee is engaged in the business of purchases and sales of footwear etc., possibility of cash turnover in such an unorganized sector could not be altogether ruled out. And that it had all along filed all the relevant details of the business turnover during demonetization, whose credit could not be denied in entirety, although it appears to have not successfully discharged its onus of pleading and proving its explanation to the very effect. Be that as it may, I thus deem it appropriate in this factual backdrop that a lumpsum addition of Rs.2 lakhs in the assessee’s hands would be just and proper with a rider that the same shall not be treated as a precedent. The assessee gets relief of Rs.33,66,768/- in other words. Necessary computation shall follow as per law.
4. So far as assessee’s assessment under section 115BBE is concerned, I quote S.M.I.L.E. Microfinance Ltd. Vs. ACIT, W.P. (MD) No.2078 of 2020 86 1742 of 2020, dated 19.11.2024 (Madras) that the impugned statutory provision would come into effect on the transaction done on or after 01.04.2017 only. The assessee is accordingly directed to be assessed under the normal provision as per law.
No other ground or argument has been pressed before us.
5. This assessee’s appeal is partly allowed.
Order pronounced in the open court on 1stJune, 2026
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