Satish Kumar vs Assessing Officer

PER SATBEER SINGH GODARA, JM

This assessee’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/250/2025-26/1069725184(1), dated 17.10.2024 involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

Case called twice. None appears at the assessee’s/appellant behest. He is accordingly proceeded ex-parte.

The Revenue vehemently argues during the course of hearings that both the learned lower authorities have rightly treated the assessee’s cash deposits during demonetisation amounting to Rs. 1,49,20,000/- as un-explained u/s 69A r.w.s. 115BBE of the Act; in assessment order dated 25.12.2019, as upheld in the lower appellate discussion. We are further taken to page 3 at Para 4.1 in the assessment discussion wherein the learned Assessing Officer appears to have noted some abnormalities in the assessee’s corresponding figures of sales or purchases/ gross profits with percentage and cash deposits; respectively.

We have given our thoughtful consideration to the assessee’s and the Revenue’s respective rival pleadings against and in support of the impugned addition. We first of all sought to verify the assessee’s regular business activities. We are informed that the learned CIT(A)/NFAC 2 | P a g e has made it clear at page 9 that he is engaged in wholesale and retail trading of Pataka Bidi and Pataka Tea & Soya Oil etc all along. We further observe at the cost of repetition that the assessee has been declaring substantial business profits as well as cash sales in the impugned as well as in the preceding assessment years. There could be further no denial to the fact that the assessee’s regular business activity of bidi, tea and soya oil sales; be it on whole sale or on retail, involves highly unorganized sectors wherein possibility of such cash sales and cash in hand accumulations could not be altogether denied although he has failed to plead and prove the same to the entire satisfaction of both the learned lower authorities.

Faced with this situation and in the interest of justice, we deem it appropriate that a lumpsump addition of Rs. 5,00,000/- in the assessee’s hands here would be just and proper with a rider that the same shall not be treated as a precedent. The assessee gets relief of Rs. 1,44,20,000/- in other words. We further 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) settling the issue that section 115BBE would come into 3 | P a g e effect on the transaction done on or after 01.04.2017 only. The assessee is accordingly directed to be assessed under “normal” provisions only. Necessary computation shall follow as per law.

The assessee’s appeal is partly allowed.