ABHISHEK,V. ISMAILA ROHTAK V. INCOME TAX OFFICER WARD 3, ROHTAK

ITA 6072/DEL/2024

AI Insights

The case involves an appeal by the assessee, Abhishek, against the order of the NFAC, Delhi, which sustained the addition of Rs. 13,15,000 to his income for the assessment year 2017-18. The addition was made under Section 69A of the Income Tax Act due to unexplained cash deposits in his bank account during the demonetization period. The assessee argued that his income from agriculture, which is exempt from tax, was the only source of income. The Tribunal considered the arguments and evidence presented, including relevant judgments, and decided to reduce the addition made to the assessee's income.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 112044 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Other Referred Cases: Deepak Sharma vs. ITA No. 2886/2022, Smile Microfinance Ltd. vs. ACIT in WP(MD) No. 2078/2020 & 1742/2020
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJAY KUMAR
• Assessee Lawyers: NAVEEN GUPTA
• Section: 144; 13; 69A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH “SMC’’ : NEW DELHI) BEFORE SHRI MAHAVIR SINGH, HON’BLE VICE PRESIDENT ITA No. 6072/Del/2024 Asstt. Year : 2017-18 Abhishek, vs. ITO, Ward-3, S/o Sh. Shri Bhagwan, Rohtak 11B, Ismaila Tehsil Sampla, Rohtak-124517 (PAN: BDZPA4728A) (Appellant) (Respondent) Appellant by : Shri Naveen Gupta, Adv. Respondent by : Shri Sanjay Kumar, Sr. DR. Date of Hearing 15.04.2025 Date of Pronouncement 15.04.2025 ORDER This appeal has been filed by the Assessee against the order dated 08.11.2024 passed by the NFAC, Delhi for the assessment year 2017-18. 2. Heard both the parties at length and perused the relevant records. 3. Brief facts of the case are that the assessee did not file his return of income during the year under consideration and made cash deposits of Rs. 13,15,000/- during the demonetization periods in his bank accounts maintained with HDFC Bank Ltd. During the assessment proceedings, the AO issued notices to the assessee enquiring about the sources of cash deposit. However, the assessee failed to respond to the notices. Therefore, the AO initiated the proceedings u/s. 144 of the Act. During the proceedings, the assessee made submission, however, the AO was not convinced with the same and he completed the assessment by making the addition of Rs. 13,15,000/- u/s. 69A of the Act and the same was also taxed u/s. 115BBE. However, in appeal, Ld. First Appellate Authority sustained the addition. Against the above, assessee appealed before the Tribunal. 2 | P a g e 4. At the time of hearing, Ld. AR has submitted that assessee is an agriculturist and having no other source of income other than agriculture and the assessee and his family owns about 13 acres of agricultural land, as per Farad Jamabandi in evidence of ownership of agricultural land, placed at page 10 and 11 of the Paper Book. In the assessment order, the AO made addition of Rs. 13,15,000/- on account of cash deposited in the bank account, during demonetization period. Since the source of income of the assessee i.e. agricultural income, is exempt from tax and there is other source of income which could generate unaccounted cash, no addition could be made or sustained for unexplained income. He further submitted that the assessee case is covered by the several judgements. He further submitted that the AO had also invoked Section 115BBE of the Act, however, ITAT Delhi in the case of Deepak Sharma, ITA nop. 2886/2022, following the judgment of the Madras High Court in the case of Smile Microfinance Ltd. WP(MD) No. 2078/2020 and 1742/2020 dated 19.11.2024, settled the issue against the department and held that the law applied to the transactions on or after 1.4.2017 and the instant case is related to assessment 2017-17, hence, the provisions of section 115BBE are not applicable to the present matter. 5. I have heard both the parties and perused thee records. I have given my thoughtful consideration to the assessee’s arguments and Revenue’s contention in support of the impugned addition. I find no reason to accept either parties stand in entirety. This is for the precise reason that neither the assessee has been able to properly explain the source of cash deposits nor the department could simply brush aside all the relevant evidence at one go. Be that as it may, the tribunal is of the considered view that in these peculiar facts, it is deemed appropriate in the larger interest of justice to confirm the impugned addition of Rs. 13,15,000/- to Rs. 3,15,000/- only with a rider that the same shall not be as a precedent. The assessee gets relief of Rs. 10,00,000/- in other words. Necessary computation shall follow as per law. 6. So far as assessee’s assessment u/s. 115 BE of the Act is concerned, Hon’ble Madras High Court in SMILE Microfinance Ltd. vs. ACIT in WP(MD) no. 2078 of 2020 & 1742 of 2020 dated 19.11.2024 (Mad.) has already settled the issue against the department that the law applies to the transaction on or after 01.04.2017 only. 3 | P a g e 7. The instant assesseee’s appeal is party allowed in the aforesaid terms. Order pronounced in the Open Court on 15.04.2025. Sd/- (MAHAVIR SINGH) VICE PRESIDENT SRBhatnagar Copy forwarded to: - 1. Appellant 2. Respondent 3. DIT 4. CIT (A) 5. DR, ITAT TRUE COPY By Order, Assistant Registrar, ITAT, Delhi Bench "