Outlook Fashions vs Income Tax Officer

PER SATBEER SINGH GODARA, JM:

This assessee’s appeal ITA no. 7782/Del/2025 for assessment year 2017-18 arises against CIT(A)/ NFAC, Delhi’s order dated 20.05.2024 (DIN & Order No. ITBA/NFAC/S/250/2024-25/1065001290(1), in proceedings u/s 143(3) r.w.s. 144 of the Income-tax Act, 1961, hereinafter referred to as the ‘Act’.

Heard both the parties. Case file perused.

The delay of 483 days in filing of the instant appeal is hereby condoned in light of the assessee’s averments made in the condonation application as on account of circumstances beyond its control in light of Collector Land Acquisition v. Mst. Katiji & another (1987) 167 ITR 471 (SC).

Next comes the sole substantive issue between the parties as the assessee is aggrieved against both the learned lower authorities’ action treating its cash deposit during demonetization credit entry(ies) of Rs. 24,73,400/- as unexplained u/s 69A read with section 115BBE of the Act; in assessment order dated 28.12.2019 & upheld in the lower appellate discussion.

Suffice to say, it has already come on record with the able assistance coming from both the parties that the assessee’s business activity(ies) of manufacturing and trading in textiles etc. is not in dispute in principle. This tribunal is of the considered view in this clinching factual backdrop that possibility of cash transactions in such an unorganized sector could not be altogether ruled out. The fact also remains that the assessee has not discharged its onus of proving the reconciliation between business turnover and cash sales to the entire satisfaction of both the learned lower authorities. Be that as it may, it is thus deemed appropriate in the larger interest of justice that a lump sum estimation of 8% after treating the assessee’s alleged cash credits as its regular business turnover, is found to be just and proper with a rider that rider that the same shall not be treated as a precedent. Necessary computation shall follow as per law. Ordered accordingly.

So far as the assessee’s assessment u/s 115BBE is concerned, the revenue could hardly dispute that hon’ble Madras high court in SMILE Microfinance Ltd. v. ACIT in WP(MD) No. 2078 of 2020 & 1742 of 2020 dated 19.11.2024 (Mad.) has already settled the issue that Section 115BBE applies on transactions on or after 01.04.2017 only. I, accordingly direct the Assessing Officer to finalize the consequential computation under normal provisions than u/s 115BBE of the Act in very terms. Ordered accordingly.

This assessee’s appeal is partly allowed in very terms.