Sh. Kewal Krishan Kumar vs ACIT

PER SATBEER SINGH GODARA, JM

These assessee’s twin appeals ITA No.1876 & 1877/Del/2026 for assessment years 2016-17 and 2017-18, arise against the Principal Commissioner of Income Tax (Appeals) -31 [in short, the “PCIT(A)”] and Commissioner of Income Tax (Appeals)-29 [in short, the “CIT(A)”], New Delhi’s orders dated 11.12.2025 & 30.08.2024 passed in case nos. CIT(A), Delhi-29/10343/2018-19 & 10467/2019-20, involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’); respectively.

Heard both the parties. Case file perused.

First of all, we take up assessee’s former appeal ITA No.1876/Del/2026. Learned counsel submits that on account of communication gaps at various levels, the assessee could not appear to plead and prove all the relevant facts in the lower appellate proceedings and therefore, larger interest of justice would be met, in case, the matter may be restored back to the PCIT(A). The Revenue vehemently support the learned lower authorities’ action making addition(s) herein on merits.

Be that as it may, the fact remains that possibility of some communication gaps at various levels in such an instance could not be altogether ruled out. It is therefore deemed appropriate in the larger interest of justice to restore the assessee’s instant appeal back to the PCIT(A) for his afresh appropriate adjudication, within three effective opportunities of hearing at the appellant’s risk and responsibility, in consequential proceedings. Ordered accordingly. This assessee’s former appeal ITA No.1876/Del/2026 is allowed for statistical purposes.

Coming to the assessee latter appeal ITA No.1877/Del/2026, the assessee has raised his sole substantive ground herein seeking to reverse both the learned lower authorities’ respective findings assessing its cash deposits, amounting to Rs.60,12,000/- during demonetization period i.e. from 09.11.2016 to 30.12.2016, as unexplained under section 68 of the Act; in assessment order dated 30.12.2019, as upheld in the lower appellate discussion.

We have given our thoughtful consideration to the assessee’s and the Revenue’s respective vehement submissions. We wish to make it clear that there has been no dispute all along that the assessee is engaged in the business of trading in rice and grain, where possibility of cash turnover in such an unorganized sector could not be altogether ruled out. And it had filed all the relevant details of the business turnover during demonetization, whose credit could not be denied in entirety, although it appears to have not successfully discharged its onus of pleading and proving its explanation to the very effect. Be that as it may, we thus deem it appropriate in this factual backdrop that a lumpsum addition of Rs. 4 lakhs in the assessee’s hands would be just and proper with a rider that the same shall not be treated as a precedent. The assessee gets relief of Rs.56,12,000/-in other words. 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 assessee’s latter appeal ITA No.1877/Del/2026 is partly allowed.

To sum up, the assessee’s former appeal ITA No.1876/Del/2026 is allowed for statistical purposes and latter appeal ITA No.1877/Del/2026 is partly allowed. A copy of this common order be placed in the respective case files.