REDEFINED CARDBOARD PVT LTD,DELHI V. INCOME TAX OFFICER WARD 21(2), DELHI

ITA 6227/DEL/2025

AI Insights

The case involves M/s. Redefined Cardboard Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, which had upheld the Income Tax Officer's decision treating the assessee's cash deposits during demonetization amounting to Rs.39.91 lakhs as unexplained under section 68 read with section 115BBE of the Income-tax Act, 1961. The Tribunal considered the nature of the assessee's business, which involved manufacturing, trading, and selling cardboards, and acknowledged the possibility of cash transactions in such an unorganized sector. After reviewing the evidence and arguments presented, the Tribunal decided to reduce the addition significantly and reassess the application of section 115BBE.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 789668 (ITAT-DELHI)
• Duration Of Justice: 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 01-10-2025
• 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: MANOJ KUMAR
• Assessee Lawyers: NIKHIL SHARMA
• Section: 143(3); 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: “SMC” NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER ITA No.6227/Del/2025 Assessment Year: 2017-18 M/s. Redefined Cardboard Pvt. Ltd., 17/665 GF, Gali No. 2, Punjabi Basti, Anand Parbat, New Delhi Vs. Income Tax Officer, Ward-21(2), New Delhi PAN: AAGCR5223H (Appellant) (Respondent) ORDER This assessee’s appeal for assessment year 2017-18, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2025-26/1079311339(1), dated 06.08.2025 involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused. 2. It emerges during the course of hearing that both the learned lower authorities have treated the assessee’s cash deposits during Assessee by Sh. Nikhil Sharma, Adv. Department by Sh. Manoj Kumar, Sr. DR Date of hearing 24.11.2025 Date of pronouncement 24.11.2025 Printed from counselvise.com ITA No.6227/Del/2025 2 | P a g e demonetization of Rs.39.91 lakhs as unexplained under section 68 r.w.s. 115BBE of the Act; in assessment order dated 28.12.2019 as upheld in the lower appellate discussion. 3. Both the learned representatives reiterate their respective stands against and in support of the lower authorities impugned findings. It does not appear to be much a dispute in principle about the assessee’s regular business activity i.e. manufacturing, trading and sale of cardboards on wholesale and retail basis; as the case may be. This being the clinching factual position, the tribunal hereby observes that possibility of raw material sourcing in cash as well as cash sales, in such a business activity in an unorganized sector could not be altogether ruled out. This is indeed coupled with the facts that the assessee appears to have filed its detailed evidence before both the learned lower authorities explaining as well as reconciling the impugned cash deposits in light of its books of account. 4. Be that as it may, it is thus deemed appropriate in the larger interest of justice that a lumpsum addition of Rs.3.91 lakhs only would be just and proper with a rider that the same shall not be Printed from counselvise.com ITA No.6227/Del/2025 3 | P a g e treated as a precedent. The assessee gets relief of Rs.36 lakhs in other words. Necessary computation shall follow as per law. 5. So far as assessee’s assessment under section 115BBE is concerned, I quote S.M.I.L.E. Microfinance Ltd. Vs. ACIT, W.P. (MD) No.2078 of 2020 & 1742 of 2020, dated 19.11.2024 (Madras) that the impugned statutory provision would come into effect on the transaction done on or after 01.04.2017 only. The assessee is accordingly directed to be assessed under the normal provision as per law. 6. This assessee’s appeal is partly allowed. Order pronounced in the open court on 24th November, 2025 Sd/- (SATBEER SINGH GODARA) JUDICIAL MEMBER Dated: 24th November, 2025. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi Printed from counselvise.com "