Kavi Raj vs Income Tax Officer, Ward-3(3)(3)

This assessee's appeal for assessment year 2017-18, arises against the Ld. Commissioner of Income Tax(Appeals)/National Faceless Appeal Centre,, New Delhi's, order vide DIN: ITBA/NFAC/S/250/2025-26/1086043352(1) dated 16.02.2026 involving proceedings under section 147 r.w.s. 144 of the Income-tax Act, 1961 (hereinafter referred to as 'the Act').

Heard both the parties. Case file perused.

It is evident during the course of hearing that the able assistance from both the parties that the assessee/appellant herein is aggrieved against the Assessing Officer's as well as ld. CIT(A)'s findings inter alia treating his cash deposit of Rs.10.30 lakhs as unexplained u/s 69A, investments of Rs.11 lakhs as unexplained u/s 69 followed by section 56(2)(vii)(b) addition of Rs.2,43,000/-; respectively.

Both the parties vehemently reiterate their respective stands against in support of impugned additions. Learned Counsel first of all submits that the assessee does not press for its aforesaid third substantive grievance keeping in mind smallness thereof. Rejected accordingly.

Next come the former twin additions of unexplained cash and unexplained investments involving two former twin grounds. It emerges from a perusal of the case records that the assessee had first deposited cash of Rs.10.30 lakhs and invested the same to the tune of Rs.11 lakhs in issue learned Counsel submits that the assessee is admittedly engaged in retail sector business wherein possibility of cash sales cannot be altogether denied. The fact remains that the he has not proved the same by way of reconciliation and factual verification of his turnover vis a vis cash deposits to the entire satisfaction of the learned lower appellate authorities. It is thus deemed appropriate that a lump sum addition of Rs.2 lakhs only in assessee’s hands shall be just and proper with a rider that the same shall not be treated as precedent. The assessee gets relief of Rs.8.30 lakhs in other words.

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.

Coming to the remaining addition of Rs.11.06 lakhs, it is clear that almost the entire sum has come from aforesaid cash deposits. The same is directed to be deleted in very terms applying telescoping benefit. Necessary computation shall follow as per law.