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Judgment
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/250/2025-26/1083694828(1), dated 15.12.2025 involving proceedings under section 144 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
Heard both the parties. Case file perused.
It emerges during the course of hearing that the assessee/appellant is aggrieved against both the lower learned authorities’ respective assessment and lower appellate findings holding his cash deposits during demonetization to the tune of Rs. 12,00,000/- as un-explained and liable to be assessed u/s 69A r.w.s. 115BBE of the Act.
I gave my thoughtful consideration to the assessee’s and the Revenue’s respective arguments. Learned counsel invites the tribunal’s attention to the Assessing Officer’s remand report dated 23rd January, 2024 wherein his case is that there existed a master-agent relationship between himself and one Mr. Rana wherein the latter had employed him for his liasioning and for carrying out his day to day activities which also included the impugned cash flow etc forming subject matter of addition in the instant case.
Learned Counsel further takes the tribunal to Page 5 and Page 28 of the said remand report wherein the aforesaid “Principle-agent” relationship between Mr. Rana and the assessee stands fairly admitted at the department’s behest as well. He could hardly dispute that neither the assessee could plead and prove the continuity of the said arrangement running from 7th November, 2013 to the F.Y. 2016-17 nor the corresponding re-conciliation/verification of the impugned cash deposits coming from Mr. Rana could be explained to the entire satisfaction of both the lower authorities. Be that as it may, keeping in mind totality of the relevant facts herein, it is deemed appropriate in the larger interest of justice that a lumpsump addition of Rs. 4,00,000/- only in the assesse’s hands would be just and proper with a rider that the same shall not be treated as a precedent.
The assessee/appellant gets relief of Rs. 8,00,000/- in other words. Learned counsel quotes S.M.I.L.E. Microfinance Ltd. Vs. ACIT, W.P. (MD) No.2078 of 2020 & 1742 of 2020, dated 19.11.2024 (Madras) wherein their lordships have settled the issue that section 115BBE would come into effect on the transaction done on or after 01.04.2017 only. The assessee is accordingly directed to be assessed under “normal” provisions only.
The assessee’s appeal is partly allowed.