AJAY KUMAR,FARIDABAD V. ITO WARD 1(1), FARIDABAD

ITA 4584/DEL/2025

AI Insights

The case involves Ajay Kumar, the appellant, who contested the order of the National Faceless Appeal Centre (NFAC) which had dismissed his appeal as barred by limitation. The Tribunal, considering the circumstances that led to the delay, decided to condone the delay and hear the case on its merits. The primary issue was the assessment of Rs. 34.90 lakhs in cash deposits made during the demonetization period, which were considered unexplained by the lower authorities. The Tribunal recognized these deposits as part of the business turnover and not as unexplained income, thus adjusting the addition to a profit estimate of Rs. 3.49 lakhs. Additionally, it was clarified that the provisions of Section 115BBE would not apply to the assessee's case as the relevant transactions occurred before the specified date.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 771981 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2017-2018
• Other Referred Cases: Collector Land Acquisition v. Mst. Katiji & another (1987) 167 ITR 471 (SC), SMILE Microfinance Ltd. v. ACIT in WP(MD) No. 2078 of 2020 & 1742 of 2020 dated 19.11.2024 (Mad.)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 147; 143(3)

Judgement Text

"1 ITA No. 4584/Del/2025 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘SMC’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER ITA No. 4584/Del/2025 Assessment Year: 2017-18 Ajay Kumar, Gali No. 3, Shekhpur Colony, Palwal-121102. PAN: AVQPK 9639 N Vs Income Tax Officer, Ward-1(1), New Delhi. APPELLANT RESPONDENT Assessee represented by Shri R.S. Poonia, CA; & Ms. Payal Jhorar, Adv. Department represented by Shri Manoj Kumar, Sr. DR Date of hearing 28.08.2025 Date of pronouncement 28.08.2025 O R D E R PER SATBEER SINGH GODARA, J.M: This assessee’s appeal for assessment year 2012-13 arises against National Faceless Appeal Centre (NFAC) Delhi’s’ order dated 22.05.2025 [DIN & Order No. ITBA/NFAC/S/250/2025-26/1076367673(1)] in proceedings u/s 147 r.w.s. 143(3) of the Income-tax Act, 1961, hereinafter referred to as the ‘Act’. Heard both the parties. Case file perused. 2. It emerges during the course of hearing that the learned first appellate authority has dismissed the assessee’s appeal in limine since barred by limitation Printed from counselvise.com 2 ITA No. 4584/Del/2025 there being delay of 55 days in filing. Considering the submissions made by the learned counsel at bar explaining the corresponding circumstances beyond control for delay in filing the appeal before the CIT(A) and to do substantial justice to parties by disposing of matters on 'merits' as envisaged in Collector Land Acquisition v. Mst. Katiji & another (1987) 167 ITR 471 (SC), I hereby condone the above delay in filing the appeal before the first appellate authority and proceed to adjudicate the instant appeal on merits after hearing both the parties. 3. Next comes the sole substantive issue between the parties. The assessee appears to have made cash deposits of Rs. 34.90 lakhs during demonetization which stand assessed as “unexplained” in both the learned lower authorities’ respective findings. There is hardly any dispute between the parties that the assessee is admittedly engaged in mattress trading retail activity etc.; and, therefore, necessary inference which would prima facie arise herein is that the impugned deposits is part of business turnover only although not reconciled or verified before the learned lower authorities. That being the case and in the larger interest of justice ,it is deemed appropriate that a lump sum addition of Rs. 3.49 lakhs @ 10% representing estimated profit element therein would be just and proper with the rider that the same shall not be treated as a precedent. Necessary computation shall follow as per law. Printed from counselvise.com 3 ITA No. 4584/Del/2025 4. So far as the assessee’s assessment u/s 115BBE is concerned, the revenue could hardly dispute that hon’ble Madras high court in SMILE Microfinance Ltd. v. ACIT in WP(MD) No. 2078 of 2020 & 1742 of 2020 dated 19.11.2024 (Mad.) has already settled the issue that Section 115BBE applies on transactions on or after 01.04.2017 only. The ld. AO is directed to ensure that the assessee shall be assessed under normal provisions qua the above addition of Rs. 3.49 lakhs (supra). 5. This assessee’s appeal ITA 4584/Del/2025 is partly allowed in very terms. Order pronounced in open court on 28.08.2025. Sd/- (SATBEER SINGH GODARA) JUDICIAL MEMBER Dated: 28.08.2025. *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "