MEENAS TOUR AND TRAVEL,NEW DLEHI V. ITO WARD 28(1), NEW DELHI

ITA 464/DEL/2025

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Meenas Tour and Travel appealed against the order of the NFAC, Delhi, which upheld the Assessing Officer's (AO) decision to estimate the business profit and add unexplained cash credits during the demonetization period. The AO estimated the business profit at 8% of the accepted turnover and added Rs. 16,62,487 as unexplained cash credits, which were deposits during the demonetization period. The Tribunal reduced the addition for unexplained cash credits but upheld the estimation of business profit. The Tribunal also clarified the inapplicability of Section 115BBE for the assessment year 2017-18, referencing a decision by the Madras High Court.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 112043 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Other Referred Cases: Smile Microfinance Ltd. vs. ACIT in WP(MD) No. 2078/2020 & 1742/2020
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANJAY KUMAR
• Assessee Lawyers: S.K. VIRMANI
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH “SMC’’ : NEW DELHI) BEFORE SHRI MAHAVIR SINGH, HON’BLE VICE PRESIDENT ITA No. 464/Del/2025 Asstt. Year : 2017-18 Meenas Tour and Travel, vs. ITO, Ward 28(1), Shop No. 1, Behind Ramada Plaza, New Delhi Janpath Lane, Ashoka Road, New Delhi – 1 (PAN: AATFM6400D) (Appellant) (Respondent) Appellant by : Shri S.K. Virmani, Adv. Respondent by : Shri Sanjay Kumar, Sr. DR. Date of Hearing 15.04.2025 Date of Pronouncement 15.04.2025 ORDER This appeal has been filed by the Assessee against the order dated 07.11.2024 passed by the NFAC, Delhi for the assessment year 2017-18. 2. Heard both the parties at length and perused the relevant records. 3. It is noted that AO estimated the business profit of Rs. 6,65,075/- being 8% of accepted turnover of Rs. 83,13,342/- and not accepted Rs. 16,62,487/- as turnover of the assessee. AO also invoked provisions of Section 68 read with section 115BBE of the Act and made the additions to the tune of Rs. 16,62,487/- being cash deposited in bank during demonetization period as unexplained cash credits. In appeal Ld. CIT(A) confirmed the action of the AO on both the issues. Against the above, assessee appealed before the Tribunal. 4. At the time of hearing, Ld. AR has submitted that assessee is a partnership firm and engaged in the business of tour and travel agents and providing tour services is a pure commissions agent filed his income tax return dated 24.9.2019 in response to notice u/s. 142(1). Assessee filed late income tax return due to Gopender Singh Meena was not 2 | P a g e well during the period and his counsel not guided him properly, as a result thereof, the AO estimated the business profit of Rs. 6,65,075/- being 8% of accepted turnover of Rs. 83,13,342/-, which needs to be deleted. He further submitted that the AO had also invoked Section 115BBE of the Act, which is contrary to the decision of the Madras High Court in the case of Smile Microfinance Ltd. WP(MD) No. 2078/2020 and 1742/2020 dated 19.11.2024, wherein it has been held that the law applied to the transactions on or after 1.4.2017 and the instant case is related to assessment 2017-18, hence, the provisions of section 115BBE are not applicable to the present matter. As regards, cash deposit of Rs. 16,62,487/- deposited in bank during demonetization period is concerned, it was submitted that the cash of Rs. 13,86,000/- and balance Rs. 3,00,448/- was deposited through IMPS directly by customers. The cash deposit of Rs. 13,86,000/- was the explained source of cash deposit, as the cash deposit in the assessee’s bank is normal practice of business from the last couple of years which deposited for air booking and hotel bookings. It is further submitted that the assessee has not deposited any banned currency during the period. Hence, the addition on this account required to be deleted. 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 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. 16,62,487/- to Rs. 3,62,487/- only with a rider that the same shall not be as a precedent. The assessee gets relief of Rs. 13,00,000/- in other words. Necessary computation shall follow as per law. 6. So far as assessee’s assessment u/s. 115 BE of the Act is concerned, 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. In so far as issue of estimating income by applying rate of 8% of the total turnover is concerned, it is noted that assessee has not filed its return of income within the prescribed limit and has not got its books of account audited, hence, the AO correctly estimating the net profit @8% of the turnover during the year under consideration and thus, Ld. CIT(A) also correctly upheld the addition of Rs. 6,65,075/- made by the AO by applying rate 8% of Rs. 83,13,342/-, which do not require any interference on my part, therefore, I uphold the action of the Ld. CIT(A) and reject the plea raised by the assessee before the Tribunal. 8. The instant assesseee’s appeal is party allowed in the aforesaid terms. Order pronounced in the Open Court on 15.04.2025. 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 "