SH.KULBEER SINGH SAJWAN,DEHRADUN V. ITO, DEHRADUN

ITA 36/DDN/2024

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The case involves Sh. Kulbeer Singh Sajwan, who appealed against the order of the Commissioner of Income Tax (Appeals), Panaji, which upheld the Income Tax Officer's assessment treating Rs. 9,25,500 of his cash deposits 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 in pharmaceuticals, his compliance with statutory requirements of maintaining books of account, and the context of demonetization which exempted essential services from certain restrictions. The Tribunal's decision reflects a balance between the legal provisions and the practical realities of the assessee's business operations during a period of significant economic disruption.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126200 (ITAT-DEHRADUN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• 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: A. S. RANA
• Keywords: HRA; Commissioner; Commissioner of Income Tax; Exempt; Department; Services
• Section: 143(3); 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, DEHRADUN “SMC” BENCH, DEHRADUN BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER (THROUGH VIDEO CONFERENCING) ITA No.36/DDN/2024 Assessment Year: 2017-18 Sh. Kulbeer Singh Sajwan, Lane No.2, Ashok Vihar, Haridwar Byepass, Dehradun, Uttarakhand Vs. Income Tax Officer, Ward-1(1)(1), Dehradun PAN :AVMPS9347K (Appellant) (Respondent) ORDER PER SATBEER SINGH GODARA, JM This assessee’s appeal for assessment year 2017-18, arises against the Commissioner of Income Tax (Appeals)/Addl./JCIT(A), Panaji’s DIN and order no. ITBA/APL/S/250/2023- 24/1061503976(1) dated 26.02.2024, involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Assessee by None Department by Sh. A.S. Rana, Sr. DR Date of hearing 17.03.2025 Date of pronouncement 25.04.2025 ITA No.36/DDN/2024 2 | P a g e 2. Case called twice. None appears at the assessee’s behest. He is accordingly proceeded ex-parte. 3. The Revenue vehemently argues during the course of hearing that both the learned lower authorities have rightly treated the assessee’s cash deposits in the relevant previous year, amounting to Rs. 15.78 lakhs, as unexplained to the tune of Rs.9,25,500/- under section 68 r.w.s. 115BBE of the Act, in the course of assessment framed on 25.12.2019 and upheld in the lower appellate discussion. 4. We having given our thoughtful consideration to the assessee’s pleadings all along and Revenue’s foregoing contentions. We find no reason to concur with either party’s stands in entirety. We make it clear first of all that the assessee/individual admittedly derives income from trading of pharmaceuticals in wholesale and retail under the name and style of his twin firms M/s. Mayank Pharma and M/s. Sajwan Medical Store. And also, that being in the specified business, he is indeed supposed to maintain his books of account as per Rule 6F(3)(i) as well, and therefore, he has nowhere been held as not to have complied with the mandatory condition of maintaining Form No. 3C over and above the regular ITA No.36/DDN/2024 3 | P a g e books of account. The Revenue also could not dispute that this assessee is engaged in essential services sector, which was indeed granted exemption during the demonetization period from 8th November, 2016 onwards, and, no specific fault has been found in his books of account. Be that as it may, it is deemed appropriate in the larger interest of justice in this backdrop that a lump sum addition of Rs.1.25 lakhs only would be just and proper with a rider that the same shall not be treated as a precedent once there is an overwhelming material that these cash deposits represent regular business only. Necessary computation shall follow as per law. The assessee gets the relief of Rs.8 lakhs in other words. 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 25th April, 2025 ITA No.36/DDN/2024 4 | P a g e Sd/- Sd/- (M. BALAGANESH) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 25th April, 2025. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi "