AI Structured Summary
Not yet generated for this judgment
Judgment
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER :
This captioned appeal has been filed by the assessee against the order of the learned Commissioner of Income Tax, Appeal, Addl/JCIT(A), Raipur [‘CIT(A)’ in short] dated 24.10.2025 arising from the assessment order dated 30.12.2019 passed by the Assessing Officer, New Delhi under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) concerning Assessment Year (A.Y.) 2017-18.
The grounds raised by the assessee are as under :
“On the facts and in the circumstances of the case and in law the Ld. NFAC/CIT(A) erred in confirming the following actions of the Assessing Officer -
i.passing order u/s 143(3) of the Act determining taxable income at Rs.55,94,540/-against returned income of Rs.35,55,190/-;
ii.making an addition of Rs.20,39,350/- being the amount of unexplained cash credit by wrongly invoking section 68 r.w.s. 115BBE of the Act;
The above actions being arbitrary, fallacious, unwarranted and illegal must be quashed with directions for appropriate relief.”
Brief facts of the case are that assessee is an individual, e-filed his return of income on 29.09.2017 declaring total income of Rs.35,55,190/-. The case was selected for scrutiny through CASS under the ‘complete scrutiny’ category. The assessment was completed under section 143(3) of the Act on 30.12.2019 making an addition of Rs.20,39,350/- under section 68 of the Act on account of unexplained cash credit. Aggrieved, assessee was in appeal before the learned CIT(A). The learned CIT(A) dismissed the appeal of the assessee by observing that the addition of Rs.20,39,350/- made under section 68 r.w.s 115BBE of the Act is found to be justified and in accordance with law.
Aggrieved, assessee is before us.
At the outset, learned Counsel of the assessee stated that NFAC/CIT(A) erred in confirming the addition of Rs.20,39,350/- being the amount of unexplained cash credit by wrongly invoking section 68 r.w.s 115BBE of the Act.
Per contra, learned DR did not raise any serious objection and relied upon the order of authorities below.
We have heard the rival submissions and perused the material available on record. In the instant case, we find that the assessee has attempted to prove the entire source of cash deposit as being advance from M/s. Amarjee. 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 assessee could not establish the identity of the said M/s. Amarjee before the AO. On the other hand, the Revenue’s endeavour to disbelieve the assessee’s contention that the same is advance, 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 ₹ 2 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 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 ground raised by the assessee is allowed.
In the result, appeal filed by the assessee in ITA No. 7618/DEL/2025 is partly allowed.