LORDS TRAVEL PVT LTD,DELHI V. ACIT, CIRCLE-15(2), DELHI

ITA 5724/DEL/2024

AI Insights

Lords Travel Pvt Ltd appealed against the order of the CIT(A)-30, which confirmed the addition of Rs. 31,54,550 as undisclosed income due to cash deposits during the demonetization period. The Assessing Officer had initially added this amount under section 68 of the Income-tax Act, 1961, considering it undisclosed income. The Tribunal found some merit in the assessee's argument that the deposits were from cash sales, but acknowledged the presence of anomalies in the documentation provided by the assessee. Consequently, the Tribunal reduced the addition to Rs. 3,50,000 and directed that this amount be taxed under normal provisions, not under section 115BBE.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711511 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2017-2018
• Other Referred Cases: S.M.I.L.E. Microfinance Ltd. Vs. ACIT, W.P. (MD) No.2078 of 2020 & 1742 of 2020
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ KUMAR JAIN
• Assessee Lawyers: SATISH AGARWAL
• Section: 68

Judgement Text

"Page 1 of 6 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘E’ BENCH, NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER, AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 5724/DEL/2024 [A.Y 2017-18] Lords Travel Pvt Ltd Vs. The A.C.I.T 74, Tolstoy Lane, Janpath Circle – 15(2) Baroda House, New Delhi New Delhi PAN: AAACL 0373 J (Appellant) Respondent) Assessee By : Shri Satish Agarwal, CA Ms. Anju Sharma, CA Department By : Shri Dheeraj Kumar Jain, Sr. DR Date of Hearing : 21.07.2025 Date of Pronouncement : 21.07.2025 ORDER PER NAVEEN CHANDRA, AM :- This appeal by the assessee is directed against the order of the ld. CIT(A)-30, Delhi dated 07.11.2024 pertaining to A.Y 2017-18. 2. The assessee has raised as many as 6 grounds of appeal. However, the solitary grievance arising out of these grounds is the confirmation of Printed from counselvise.com ITA Nos. 2682 /DEL/2023 & 897/DEL/2024 Metro Stone Crusher Vs ITO [A.Ys 2016-17 & 2017-18] Page 2 of 6 addition of Rs. 31,54,550/- made by the Assessing Officer on account of cash deposited in Bank during demonetization period u/s 68 of the Income-tax Act, 1961 [the Act, for short]. 3. Briefly stated, the facts of the case are that the assessee is engaged in the business of running a travel agency. Assessee purchases tickets from various airlines and directly from other agents as well. Such tickets in turn are sold to other agents and passengers directly. The assessee electronically filed its return of Income on 28.10.2017 declaring total income of Rs. 31,09,980/-. 4. During the course of assessment proceedings, the Assessing Officer noticed that during the demonetization period the assessee had deposited a sum of Rs. 31,54,500/- in specified bank notes [SBN]. In response to notice issued requiring the assessee to explain the details and source of cash, the assessee filed requisite details and list of customers who purchased air tickets alongwith cash receipts. 5. The Assessing Officer noticed several anomalies in the submissions of the assessee and came to the conclusion that the assessee has been unable to explain with supporting documentary evidences that the Printed from counselvise.com ITA Nos. 2682 /DEL/2023 & 897/DEL/2024 Metro Stone Crusher Vs ITO [A.Ys 2016-17 & 2017-18] Page 3 of 6 source of cash deposit during the demonetization period was from cash sales of tickets. 6. Quoting the provisions of section 68 of the Act, the Assessing Officer held that the sum of Rs. 31,54,500/- represented undisclosed income of the assessee and was deposited during the demonetization period and accordingly taxed the same under the provisions of section 115BBE of the Act at special rate and no deduction in respect of any expenditure or allowance or benefit of set off of any loss will be allowed. 7. When the aggrieved assessee went in appeal before the ld. CIT(A), the ld. CIT(A) upheld the addition of Rs. 31,54,500/- as the assessee has not met the evidentiary burden required to refute this addition. The assessee is now before us. 8. At the very outset, the ld. counsel for the assessee submitted that the cash deposits were out of cash sales. It is the say of the ld AR that the Assessing Officer has not pointed out any defect in the account and the Assessing Officer has not rejected the books of account. Printed from counselvise.com ITA Nos. 2682 /DEL/2023 & 897/DEL/2024 Metro Stone Crusher Vs ITO [A.Ys 2016-17 & 2017-18] Page 4 of 6 9. Per contra, the ld. DR relied upon the orders of the authorities below. 10. We have heard the foregoing vehement rival contentions and have perused the relevant material on record. We have given thoughtful consideration to the facts of the instant case and the and find some merit in the assessee's argument. The reason extended by the assessee for increased sale cannot be discarded out of hand. The cash deposit out of sale proceeds therefore can be accepted to some extent. In the instant case, we find that the assessee has attempted to prove the entire source of cash deposit during demonetization as cash sales. Although the assessee, prima facie, appears to have discharged its onus of explaining source of cash deposit, it’s contentions to prove the source, hardly deserves to be accepted in entirety especially when the AO found that the assessee was maintaining two sets of receipts and some of the receipts had combined names of customers and some cash sales were to unknown persons. On the other hand, the Revenue’s endeavour to disbelieve the assessee’s contention that cash deposit has been made out of sales, cannot be fully justified. In this factual matrix, there is some element of failure to explain some of the cash deposit, cannot be ruled out. Be that as it may, it is deemed appropriate, in larger interest of justice, that a lump-sum addition of ₹ 3,50,000/- only would be just Printed from counselvise.com ITA Nos. 2682 /DEL/2023 & 897/DEL/2024 Metro Stone Crusher Vs ITO [A.Ys 2016-17 & 2017-18] Page 5 of 6 and proper with a rider that the same shall not be treated as a precedent, so as to cover all loopholes. The ground of appeal no 1 to 6 is partly allowed. 11. In so far as assessee's levy of tax at a higher rate under section 115BBE of the Act is concerned, we find that the Madras High Court in the Writ petition in the case of S.M.I.L.E. Microfinance Ltd. Vs. ACIT, W.P. (MD) No.2078 of 2020 & 1742 of 2020, dated 19.11.2024 (Madras) has held that the impugned statutory provision would come into effect on the transaction done on or after 01.04.2017 only. Accordingly, we direct the AO to tax the addition under normal provisions of tax and not under the provisions of 115BBE. The additional ground raised by the assessee is allowed. 10. In the result, appeals of assessee in ITA Nos. 5724/DEL/2024 is partly allowed. Order pronounced in open court on 21.07.2025. Sd/- Sd/- [SATBEER SINGH GODARA] [NAVEEN CHANDRA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 21st JULY, 2025. VL/ Printed from counselvise.com ITA Nos. 2682 /DEL/2023 & 897/DEL/2024 Metro Stone Crusher Vs ITO [A.Ys 2016-17 & 2017-18] Page 6 of 6 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) Asst. Registrar, 5. DR ITAT, New Delhi Sl No. PARTICULARS DATES 1. Date of dictation of Tribunal Order 2. Date on which the typed draft Tribunal Order is placed before the Dictation Member 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. P.S./P.S. 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. P.S./P.S 7. Date on which the final Tribunal Order is uploaded by the Sr. P.S./P.S. 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. The date on which the file goes for xerox 12. The date on which the file goes for endorsement 13. The date on which the file goes to the Superintendent for checking 14. The date on which the file goes to the Assistant Registrar for signature on the Tribunal order 15. Date on which the file goes to the dispatch section 16. Date of Dispatch of the Order Printed from counselvise.com "