Gandaram & Sons Jewellers Pvt Ltd Vs ACIT (ITAT Delhi)
Demonetisation Cash Deposits Largely Accepted: ITAT Restricts Addition to ₹2 Lakh and Disallows Section 115BBE for AY 2017-18
The Delhi ITAT partly allowed the appeal of Gandaram & Sons Jewellers Pvt. Ltd. and substantially reduced the addition made on account of cash deposits during the demonetisation period. The Assessing Officer had treated ₹2.25 crore as unexplained cash credit under Section 68 out of total deposits of ₹3.71 crore, after giving credit for income declared under IDS-2016, and the CIT(A) had confirmed the addition.
The Tribunal noted that the assessee had explained the deposits as arising mainly from sales and that the Revenue’s rejection of the explanation was not fully justified, especially without rejection of books of account and without concrete adverse evidence. At the same time, the Tribunal observed that some deficiency in explanation could not be ruled out. Balancing equities, it restricted the addition to a lump-sum of only ₹2 lakh to cover possible loopholes, clarifying that this was not to be treated as a precedent.
On the issue of tax rate, relying on the Madras High Court decision in S.M.I.L.E. Microfinance Ltd., the Tribunal held that the amended provisions of Section 115BBE apply only to transactions on or after 01.04.2017 and therefore could not be invoked for AY 2017-18. The balance addition was directed to be taxed under normal provisions. The appeal was thus partly allowed with substantial relief to the assessee.
FULL TEXT OF THE ORDER OF ITAT DELHI
