ASHISH ANAND,NEW DELHI V. ITO, WARD-29(8), NEW DELHI

ITA 1788/DEL/2023

AI Insights

The case involves Ashish Anand, the appellant, who contested the addition of Rs.26,18,000 to his income under section 69A of the Income Tax Act, 1961, due to cash deposits in his bank accounts during demonetization. The deposits were made by his employer, Jitendra Pal, and were subsequently transferred back to him. The primary legal contention was whether these transactions justified the addition under section 69A. The Tribunal found the source of the deposits plausible and remanded the matter back to the AO for verification of the transferred amounts. The Tribunal also addressed the applicable tax rate on any addition, referencing a relevant High Court decision that affected the tax rate applicable for the assessment year 2017-18.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298839 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Other Referred Cases: Smile Microfinance Ltd. vs. ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVANI BANSAL; OM PRAKASH
• Assessee Lawyers: KANISHAK RANA
• Section: 13; 69A

Judgement Text

"आयकर अपीलीय अिधकरण िदʟी पीठ “एस एम सी”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं.1788/िदʟी/2023 (िन.व. 2017-18) ITA No.1788/DEL/2023 (A.Y.2017-18) Ashish Anand, C/o Mr. Kanishk Rana, Advocate, 112, Hans Bhawan, Wing-2, IP Estate, New Delhi 110002 PAN: ATFPA-5622-E ...... अपीलाथᱮ/Appellant बनाम Vs. Income Tax Officer, Ward 29(8), Dr. SPM Civic Centre, Minto Road, New Delhi 110002 ..... ᮧितवादी/Respondent अपीलाथŎ Ȫारा/ Appellant by : Shri Kanishak Rana, Advocate ŮितवादीȪारा/Respondent by : Ms. Shivani Bansal, Sr. DR & Shri Om Prakash, Sr. DR सुनवाई कᳱ ितिथ/ Date of hearing : 10/01/2025 घोषणा कᳱ ितिथ/ Date of pronouncement : : 04/04/2025 आदेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as 'the CIT(A)') dated 19.04.2023, for assessment year 2017-18. 2. The primary issue raised by the assessee in appeal is against the addition of Rs.26,18,000/- u/s. 69A of the Income Tax Act,1961(hereinafter referred to as ‘the Act’) made by Assessing Officer (AO) on account of cash deposits in bank of the assessee during demonetization. 2 ITA No.1788/Del/2023 (AY 2017-18) 3. Shri Kanishak Rana, appearing on behalf of the assessee submits that the assessee was employed with one Mr. Jitendra Pal who was running a shop under the name and style J.P Mobiles. After declaration of demonetization the employer of assessee, Shri Jitendra Pal deposited total sum of Rs.23,51,000/- in assessee’s saving bank account no.30068688518 with State Bank of India and Rs.2,67,000/- in assessee’s bank account no.033201005126 with ICICI Bank Ltd. The entire amount deposited by Jitendra Pal was subsequently transferred by the assessee to Jitendra Pal. To substantiate his contention, the assessee furnished copy of his State Bank of India saving bank account no. 30068688518 statement and also bank account statement of account no. 033201005126 with ICICI Bank Ltd. Referring to SBI bank statement, as a sample he pointed that on 21.10.2016, Rs.1,00,004/- was transferred to Jitendra Pal, and on the same date, vide separate transaction of an equal amount was further transferred to Jitendra Pal by the assessee. He further referred to transaction on 09.11.2016, wherein the assessee had transferred Rs.7,902.30/- to Jitendra Pal from his SBI bank account. Likewise, the entire cash deposits in the bank account of the assessee with SBI and ICICI Bank Ltd. were transferred to Jitendra Pal. He submitted that the bank statements were furnished to the AO as well as the CIT(A), however, both the Authorities failed to appreciate the submissions and the documentary evidences filed by the assessee. 4. Per contra, Ms. Shivani Bansal representing the department vehemently defended the impugned order and prayed for dismissing appeal of the assessee. 5. Both sides heard. The assessee in appeal has assailed the addition of Rs.26,18,000/- u/s. 69A r.w.s. 115BBE of the Income Tax Act,1961(hereinafter referred to as ‘the Act’) on account of cash deposits in bank account of the assessee during the period of demonetization. The assessee has explained source of cash 3 ITA No.1788/Del/2023 (AY 2017-18) deposits in his bank accounts i.e. the cash was deposited by his employer Jitendra Pal. The assessee further explained that the entire cash deposit in the bank account of the assessee was subsequently transferred to Jitendra Pal through banking channel. To substantiate his contention, the assessee has furnished his saving bank account statements from SBI and ICICI Bank Ltd. The assessee has also placed on record bank statements of Jitendra Pal. The source explained by the assessee for cash deposits is plausible. Hence, in the facts of the case, I deem it appropriate to restore this issue to the AO for limited purpose of quantification of amount transferred by the assessee from his bank accounts maintained with SBI and ICICI Bank Ltd. to Jitendra Pal. To the extent amount transferred from aforementioned saving bank accounts of the assessee to Jitendra Pal is proved, no addition is warranted. 6. Here, it is pertinent to mention that the AO has invoked the provisions of section 115BBE of the Act. The provisions of section 115BBE were amended w.e.f. 15.12.2016 to increase the rate of tax from 30% to 60%. The Hon’ble Madras High Court in the case of Smile Microfinance Ltd. vs. ACIT in WP(MD)No. 2078 of 2020 dated 19.11.2024 has held that the revised rate of tax @60% would be effective only from 01.04.2017. Accordingly, prior to 01.04.2017 the rate of tax applicable would be 30%. Hence, for AY 2017-18 the rate of tax applicable would be prior to amendment. The revised rate of tax cannot be applied retrospectively. Thus, after verification of amount transferred to Jitendra Pal, in any addition u/s. 69A of the Act survives the same would be subject to tax at the rate as was applicable prior to amendment i.e. 30%. 4 ITA No.1788/Del/2023 (AY 2017-18) 7. In the result, appeal of the assessee is allowed for statistical purpose in the terms aforesaid. Order pronounced in the open court on Friday the 04th day April, 2025. Sd/- Sd/- (VIKAS AWASTHY) ᭠याियक सद᭭य/JUDICIAL MEMBER िदʟी/Delhi, ᳰदनांक/Dated 04.04.2025 NV/- ᮧितिलिप अᮕेिषतCopy of the Order forwarded to : 1. अपीलाथᱮ/The Appellant , 2. ᮧितवादी/ The Respondent. 3. The PCIT/CIT(A) 4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी 5. गाडᭅ फाइल/Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, DELHI 5 ITA No.1788/Del/2023 (AY 2017-18) Details Date 1 Draft of dictation of Tribunal order 02.04.2025 2 Draft on which the typed draft Tribunal order is placed before the Dictation Member 03.04.2025 3 Date on which the typed draft Tribunal order is placed before the other Member 4 Date on which the approved draft Tribunal order comes to the Sr.PS/PS 5. Date on which the fair Tribunal Order is placed before the Dictating Member for pronouncement 6. Date on which the signed order comes back to the Sr.PS/PS 7. Date on which the final Tribunal order is uploaded by the Sr.PS/PS on official website 8 Date on which the file goes to the Bench Clerk alongwith Tribunal Order 9 Date of killing off the disposed of files on the judiSIS portal of ITAT by the Bench Clerks 10 Date on which the file goes to the Supervisor (Judicial) 11 Date on which the file goes for Xerox 12 Date on which the file goes for endorsement 13 Date on which the file goes to the superintendent for checking 14 The date on which the files goes to the Assistant Registrar for endorsement of the order 15 Date on which the file goes to dispatch section 16 Date of dispatch of the order "