FEMMELLA FASHIOSN INDIA LTD,DELHI V. ITO WARD 9(1), DEHLI

ITA 5294/DEL/2025

AI Insights

The case involves M/s Femmella Fashions India Ltd., which appealed against the order of the CIT(A)/NFAC, Delhi, concerning the assessment year 2017-18. The primary issue was the treatment of cash deposits amounting to Rs.1,24,19,650/- as unexplained under Section 68 read with Section 115BBE of the Income Tax Act, 1961. The Tribunal acknowledged the assessee's engagement in regular business activities but noted the failure to reconcile all cash sales and business turnover, leading to a partial addition of Rs.10,00,000/- as a gross profit element. Additionally, the Tribunal ruled that the provisions of Section 115BBE, applicable for transactions post-01.04.2017, should not apply to the assessee, directing an assessment under normal provisions.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 831153 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: misc
• Appeal Filed On: 29-08-2025
• Other Referred Cases: S.M.I.L.E Microfinance Limited Vs. The ACIT CC-1
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANKUSH KALRA
• Assessee Lawyers: ROHIT JAIN
• Section: 143(3); 68; 2

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’, NEW DELHI Before Sh. Satbeer Singh Godara, Judicial Member & Sh. Amitabh Shukla, Accountant Member ITA No. 5294/Del/2025 : Asstt. Year : 2017-18 M/s Femmella Fashions India Ltd., 11/5B, 1st Floor, Pusa Road, New Delhi-110005 Vs Income Tax Officer, Ward-9(1), New Delhi-110002 (APPELLANT) (RESPONDENT) PAN No. AABCF1587F Assessee by : Sh. Rohit Jain, Adv., Sh. Kunal Pandey, Adv. & Sh. Shivam, CA Revenue by : Ms. Ankush Kalra, Sr. DR Date of Hearing: 14.01.2026 Date of Pronouncement: 21.01.2026 ORDER Per Satbeer Singh Godara, Judicial Member: This assessee’s appeal for Assessment Year 2017-18, arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2025–26/1078023941(1) dated 30.06.2025, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”). 2. Heard both the parties at length. Case file perused. 3. We note during the course of hearing that the assessee’s sole substantive grievance raised in the instant appeal is directed against both the learned lower authorities’ action treating it’s cash deposits of Rs.1,24,19,650/- as unexplained Printed from counselvise.com ITA No. 5294/Del/2025 Femmella Fashion India Ltd. 2 u/s 68 r.w.s. 115BBE of the act; in assessment order dated 28.12.2019 as upheld in the lower appellate discussion. 4. Faced with this situation, both the learned representatives reiterate the assessee’s and the Revenue’s respective stands against and in support of the impugned addition. The assessee is admittedly stated to be engaged in manufacturing and trading of garments, accessories and fabrics as per the assessment discussion itself. Coupled with this, it had filed the relevant details of month-wise cash sales, cash deposits in F.Y. 2015-16 as well as 2016-17 seeking to plead and prove that the foregoing cash deposits infact represented the business turnover only which has been rejected by both the learned lower authorities. 5. Faced with this situation, we do not see any reason to express our concurrence with either parties stand. This is for the precise reason that the assessee has proved his status as engaged in regular business activity in garments manufacturing, trading etc., it could not get all of it’s corresponding cash sales and business turnover reconciled and verified before both the learned lower authorities. The fact also remains that such a failure could not result in rejection of it’s entire business turnover as well. We thus deem it appropriate in this factual backdrop that a lump sum addition of Printed from counselvise.com ITA No. 5294/Del/2025 Femmella Fashion India Ltd. 3 Rs.10,00,000/- only prima facie representing GP element of the above cash deposits amounting to Rs.12,59,650/- would be just and proper with a rider that the same shall not be treated as a precedent. We accordingly grant relief of Rs.1,14,19,650/- to the assessee in very terms. Necessary computation shall follow as per law. 6. So far as assessee’s assessment under Section 115BBE is concerned, we quote S.M.I.L.E Microfinance Limited Vs. The ACIT CC-1 in W.P.(MD) No.2078 of 2020 & W.M.P. (MD) No. 1742 of 2020 held that the said provision applied for transactions done on or after 01.04.2017 only. The assessee is accordingly directed to be assessed under normal provisions only. 7. This assessee’s appeal is partly allowed. Order Pronounced in the Open Court on 21/01/2026. Sd/- Sd/- (Amitabh Shukla) (Satbeer Singh Godara) Accountant Member Judicial Member Dated: 21/01/2026 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR Printed from counselvise.com "