KUNAL SINGHAL,SAHARANPUR V. INCOME TAX OFFICER, WARD-3(3)(4), DEOBAND, DEOBAND

ITA 6719/DEL/2025

AI Insights

The case involves Kunal Singhal, the appellant, who contested the assessment of his cash deposits during the demonetization period as unexplained under section 68 read with section 115 BBE of the Income-tax Act, 1961. The Assessing Officer had treated deposits amounting to Rs. 22,37,500 as unexplained and estimated the net profit on these transactions at 5%, higher than the 4% declared by the assessee. The Tribunal heard arguments from both parties and decided to maintain the net profit estimation at 5% but directed a reassessment of the nature of the cash deposits. Furthermore, the Tribunal addressed the applicability of section 115BBE, directing that the assessment should be under normal provisions as section 115BBE applies only to transactions on or after 01.04.2017.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 788190 (ITAT-DELHI)
• Duration Of Justice: 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 25-10-2025
• Other Referred Cases: SMILE Microfinance Ltd. v. ACIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 143(3); 68

Judgement Text

"1 ITA No. 6719/Del/2025 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘SMC’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER ITA No. 6719/Del/2025 Assessment Year: 2017-18 Kunal Singhal, S/o Shri Atul Bihari, Moh. Nechalgagh, Deoband-247554. PAN: AZYPS 4710 Q Vs Income tax Officer, Ward-3(3)(4), Deoband. APPELLANT RESPONDENT Assessee represented by Shri Ankit Gupta, Adv. (Through VC) Department represented by Shri Manoj Kumar, Sr. DR Date of hearing 27.11.2025 Date of pronouncement 27.11.2025 O R D E R PER SATBEER SINGH GODARA, JM: This assessee’s appeal ITA no. 6719/Del/2025 for assessment year 2017-18 arises against CIT(A)/JCIT(A)-5, Kolkata’s order dated 08.10.2025 (DIN & Order No. ITBA/APL/S/250/2025-26/1081555848(1), in proceedings u/s 143(3) of the Income-tax Act, 1961, hereinafter referred to as the ‘Act’. Heard both the parties at length. Case file perused. 2. It transpires during the course of hearing that the assessee is aggrieved against both the learned lower authorities’ action, inter alia, treating his cash Printed from counselvise.com 2 ITA No. 6719/Del/2025 deposits during demonetization amounting to Rs. 22,37,500/- as unexplained u/s 68 read with section 115 BBE of the Act followd by estimation of net profit on the total transaction @ 5% as against that declared @ 4%; respectively, in assessment order dated 24.12.2019 as upheld in the lower appellate discussion. 3. That being the case, learned counsel very fairly submits that the assessee does not wish to press for estimation of his net profit from 4% to 5% in question. Rejected accordingly. 4. Next comes the sole surviving substantive issue of correctness of both the learned lower authorities’ action assessing his cash deposits of Rs. 22.37 lakhs as “unexplained”. There could be hardly any dispute that assessee has already suffered net profits estimation from 4% to 5% hereinabove. That being the case, the reasonable inference which could prima facie be drawn is that the same per se formed part of his business turnover although not specifically reconciled or verified by both the lower authorities. Faced with this situation, the tribunal hereby finds part merit in his case and directs the learned Assessing Officer to assess the impugned cash deposits @ 5% in preceding terms. Necessary computation shall follow as per law. 5. 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. Printed from counselvise.com 3 ITA No. 6719/Del/2025 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. I, accordingly direct the Assessing Officer to finalize the consequential computation under normal provisions than u/s 115BBE of the Act in very terms. Ordered accordingly. No other ground or argument has been pressed. 6. This assessee’s appeal is partly allowed. Order pronounced in open court on 27.11.2025. Sd/- (SATBEER SINGH GODARA) JUDICIAL MEMBER Dated: 28.11.2025. *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 "