BRAHAM DATT SHARMA,GURGAON V. ITO WARD 1(3) GURGAON, GURGAON

ITA 293/DEL/2025

AI Insights

The case involves an appeal by Braham Datt Sharma against the order of the Addl./JCIT(A)-2, Guwahati, which confirmed an addition of Rs. 8,67,000 to Sharma's income for the assessment year 2017-18. The addition was initially made by the Assessing Officer (AO) under section 69A of the Income Tax Act, citing undisclosed sources of income due to unexplained cash deposits during the demonetization period. The Tribunal heard arguments from both parties, with the assessee claiming that the sources of the deposits were legitimate and documented, including funds from family and agricultural income. The Tribunal, considering the submissions and the legal precedent, decided to reduce the addition but did not completely set it aside, emphasizing the need for a balanced approach in the interest of justice.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 314023 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Other Referred Cases: SMILE Microfinance Ltd. vs. ACIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHYAM MANOHAR SINGH
• Assessee Lawyers: JAI BHAGWAN SAIN
• Keywords: Set aside; Income from undisclosed sources

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH “SMC’’ : NEW DELHI) BEFORE SHRI MAHAVIR SINGH, HON’BLE VICE PRESIDENT ITA No. 293/Del/2025 Asstt. Year : 2017-18 Braham Datt Sharma, vs. ITO, Ward 1(3), H.No. 1700, Laxman Vihar, Gurgaon Phase-2, Gurgaon, Haryana (PAN: AMKPS6377C) (Appellant) (Respondent) Appellant by : Shri Jai Bhagwan Sain, Adv. Respondent by : Shri Shyam Manohar Singh, Sr. DR. Date of Hearing 06.05.2025 Date of Pronouncement 06.05.2025 ORDER This appeal by the assessee is emanating from the order of the Addl./JCIT(A)-2, Guwahati in Appeal No. ITBA/APL/S/250/2024- 25/1071406712(1) dated 20.12.2024 on the following grounds:- 1. That the order of the AO is illegal, arbitrary, unjust and bad in law which needs to be set aside. 2. That the order of the Addl./JCIT(A)-2, Guwahati also bad in law in confirming addition of Rs. 867000/-. 3. That the additions of Rs. 867000/- is wrong, illegal, arbitrary, bad in law and needs to be set aside by this Hon’ble Bench. 2. Heard both the parties at length and perused the relevant records. 3. Brief facts of the case are that AO made the addition of Rs.10,80,000/- by noting that assessee deposited cash in bank accounts during the year under consideration including cash deposits made during the demonetization period from undisclosed sources, but the sources were neither explained with documentary evidences nor such money offered for taxation, the onus is on the assessee’s to prove that the cash deposits made and 2 | P a g e hence, added to the income of the assessee as income from undisclosed sources and added the amount of Rs. 10,80,000/- in the hands of the assessee u/s 69A of the Act and the same was taxed u/s. 115BBE @ 60%. However, in appeal, Ld. First Appellate Authority sustained the addition of Rs. 8,67,000/-. Against the above, assessee appealed before the Tribunal. 4. At the time of hearing, Ld. AR has submitted that action of the Ld. CIT(A) for sustaining addition of Rs. 8,67,000/- by treating the cash deposit during the year under consideration including the demonetization period in bank account as income from the undisclosed sources. He further submitted that the source of cash deposited were out of amount received from his post office account, received from wife and daughter in law;; received from Son and having own savings; ancestral agriculture income and received from wife of her agriculture income and amount received from Sonipat (Haryana) post office and ancestral agriculture income etc. Hence, he submitted that impugned cash deposit is completely genuine and source of cash deposit is clearly identified with documentary evidences, and therefore addition on this account needs to be deleted. Ld. DR relied upon the order of the Ld. CIT(A). 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 fully 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. 8,67,000/- to Rs. 3,10,857/- only with a rider that the same shall not be as a precedent. The assessee gets relief of Rs. 5,56,143/- in other words. Necessary computation shall follow as per law. 6. So far as assessee’s assessment u/s. 115 BBE of the Act is concerned, in view of 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 06.05.2025. 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 "