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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 “Ld. CIT(A/NFAC”], Delhi’s order dated 26/06/2025 passed in case no. CIT(A), Delhi-NFAC/2016-17/10290792, involving proceedings under section 147 r.w. 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 both the learned lower authorities’ respective assessment and lower appellate findings have treated the assessee’s cash deposits during demonization amounting to Rs. 19.03 lakhs as unexplained under Section 69A followed by further addition of his remaining credits of Rs. 29,032,250/- as business income liable to be assessed @ 8%; respectively.
I have given my thoughtful consideration to the assessee’s and Revenue’s respective submissions. Suffice to say, coming to the former addition of cash deposits during demonization, this tribunal is of the considered view that once he has already been assessed as business income @ 8%, an letter issue of the necessary inference would arise is that the same represent trading transactions only in normal business activities. I, therefore, find merit in the assessee’s case that both the lower authorities could not have assessed it as unexplained under Section 69A of the Act. The impugned addition is hereby reversed to this limit extent in very terms.
Next comes the letter issued of GP estimation @8% in the assessee’s hands. This Tribunal is of the considered view herein again that neither both the lower authorities have rejected his books nor any satisfactory reply has come from his side during the course of hearing. The facts also remains that the impugned estimation @8% prima facie appears to be on a higher side as well. It is thus deemed appropriate in the larger interest of justice that a lump sum uniform estimation of the assessee’s GP @ 4% or that declared whichever is higher for the above twin issues would be just and proper with a rider that the same shall not be treated as a precedent. Necessary computation shall follow.
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 the impugned statutory provision of section 115BBE would come into effect on transactions done on or after 01.04.2017 only. The Assessee is accordingly directed to be assessed under “normal provisions only.
This Assessee’s appeal is partly allowed in above terms.