Tankeshwar Gohil Vs ITO (ITAT Delhi)
₹1.50 Crore Demonetisation Deposit Partly Sustained – ITAT Restricts Addition to ₹5 Lakh & Rules 115BBE Inapplicable for Pre-April 2017 Transactions
Assessee, engaged in money transfer business through Oxygen Services India Pvt. Ltd., had deposited ₹1.50 crore in cash during demonetisation. AO treated the amount as unexplained money u/s 69A, taxed u/s 115BBE, & CIT(A) upheld the same.
Before Tribunal, Assessee furnished a detailed paper book of 517 pages, containing records of customer transactions & business activities, contending that the deposits were business receipts. The Tribunal noted that both AO & CIT(A) failed to consider the business nature of receipts & that the Assessee had at least partly explained the source.
Considering the overall facts, Tribunal held that a lump-sum addition of ₹5 lakh would meet the ends of justice & granted relief of ₹1.45 crore.
Further, relying on SMILE Microfinance Ltd. v. ACIT (Madras HC, 2024), Tribunal directed that Section 115BBE (tax on unexplained income) applies only to transactions on or after 01-04-2017, & thus normal tax provisions would apply.
FULL TEXT OF THE ORDER OF ITAT DELHI
This assessee’s appeal ITA no. 276/Del/2025 for assessment year 2017-18 arises against CIT(A)/ NFAC, Delhi’s order dated 22.08.2024 (DIN & Order No. ITBA/NFAC/S/250/2024-25/1067859891(1), in proceedings u/s 143(3) r.w.s. 263 of the Income-tax Act, 1961, hereinafter referred to as the ‘Act’.
