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Judgment
PER NAVEEN CHANDRA, A. M.:
This appeal of revenue is directed against the order of the ld. Commissioner of Income Tax (Appeals)-30, Delhi dated 14.02.2025 pertaining to AY 2017-18.
At the outset the ld DR pointed out that the addition has been made of Rs. 1.68 crores u/s 68 of the Act which was made as the assessee had failed to discharge its onus by proving the genuineness of the cash deposit. It is to say by the ld DR that the cash deposit during demonetization period was disproportionate vis-à-vis cash sales during the same period in the preceding year.
On the other hand, the ld counsel of the assessee stated that the assessee is in jewellery business and the books of account was not rejected. The cash sales, book of the stock register was not rejected and therefore, the cash deposit should be accepted as coming out of sale of the assessee.
We have heard the rival submissions and have perused the relevant material on record. In the instant case, we find that the assessee has attempted to prove the entire source of cash deposit during demonetization as cash sales. Although the assessee, prima facie, appears to have discharged its onus of explaining source of cash deposit, it’s contentions to prove the source, hardly deserves to be accepted in entirety especially when the AO found abnormal jump in the cash deposit as compared to the same period in the preceding year. On the other hand, the Revenue’s endeavour to disbelieve the assessee’s contention that cash deposit has been made out of sales, cannot be fully justified. In this factual matrix, there is some element of failure to explain some of the cash deposit, cannot be ruled out. Be that as it may, it is deemed appropriate, in larger interest of justice, that a lump-sum addition of ₹ 8 lakh only would be just and proper with a rider that the same shall not be treated as a precedent, so as to cover all loopholes. The ground of appeal no 1 to 5 is partly allowed.
In so far as assessee's levy of tax at a higher rate under section 115BBE of the Act is concerned, we find that the Madras High Court in the Writ petition in the case of S.M.I.L.E. Microfinance Ltd. Vs. ACIT, W.P. (MD) No.2078 of 2020 & 1742 of 2020, dated 19.11.2024 (Madras) has held that the impugned statutory provision would come into effect on the transaction done on or after 01.04.2017 only. Accordingly, we direct the AO to tax the addition under normal provisions of tax and not under the provisions of 115BBE. The additional ground raised by the assessee is allowed.
In the result, appeal of Revenue in ITA No. 3735/DEL/2025 is partly allowed.