Income Tax Officer vs M/s. Jhelum Javerri Pvt. Ltd.

PER SATBEER SINGH GODARA, JM

This Revenue’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/250/2025-26/1078498658(1), dated 15.07.2025 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.

Coming to the Revenue’s sole substantive grievance based on the instant appeal, learned CIT(A) has erred in law and on facts in reversing the Assessing Officer’s action treating the assessee’s cash deposits during demonetization amounting to Rs. 2,83,46,500/- as unexplained u/s 68 of the Act.

The Revenue vehemently argues during the course of hearing that the Assessing Officer’s assessment dated 16.12.2019 framed in the assessee’s case had rightly treated his cash deposits during demonetization amounting to Rs. 2,83,46,500/- which has been wrongly deleted in the lower appellate discussion.

Both the learned representatives vehemently reiterate their respective stands in support and against the impugned cash deposit addition. There does not seem to be much a dispute between the parties that this assessee/individual is engaged in the business of retail sale of jewellery etc. He has further declared sales turnover of Rs.5,75,42,326/- out of which cash sales was Rs.3,61,44,451/- as per the lower appellate discussion.

That being the case, it could safely be presumed that although the assessee/respondent could not reconcile and verify his impugned cash deposits forming part of sales of jewelleries to the satisfaction of the Assessing Officer, the same could be termed as the sole reason for rejecting his entire explanation as well. We thus deem it appropriate in this factual backdrop that a lumpsum addition of Rs.15 lakhs only in the assessee/respondent’s hands would be just and proper, covering all shortcomings, with a rider that the same shall not be treated as a precedent. Necessary computation shall follow as per law.

So far as assessee’s assessment under section 115BBE is concerned, we quote S.M.I.L.E. Microfinance Ltd. Vs. ACIT, W.P. (MD) No.2078 of 2020 & 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.

This Revenue’s appeal is partly allowed.