TaxTMI 
TaxTMI 
2026 (5) TMI 949
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....the case. 2. The NFAC, Delhi erred in sustaining the addition of Rs. 17,53,400/- being the value of the cash deposits reckoned to have been made by the appellant in SBNs during demonetisation period as unexplained cash deposits in terms of Section 69A of the Act in the computation of taxable total income without assigning proper reasons and justification. 3. The NFAC, Delhi failed to appreciate that provisions of Section 69A r.w.s 115BBE of the Act had no application to the present facts and in circumstances of the case, there by vitiating the findings in relation thereto. 4. The NFAC, Delhi failed to appreciate that the pre-requisite conditions required for making an addition in terms of Section 69A of the Act were absent in the present case and ought to have appreciated that in any event provisions of Section 115BBE of the Act had no application in view of the law declared by the Madras High Court on its applicability from Assessment Year: 2018-19 only, thereby negating the findings in relation thereto. 5. The NFAC, Delhi failed to appreciate that having placed on record the details of the actual cash deposits made in SBNs amounting to Rs. 2,17....
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....ssment order was passed out of time, invalid, passed without jurisdiction and not sustainable both on facts and in law. 12. The NFAC, Delhi failed to appreciate that having not adhered to the prescription of faceless regime, the consequential appellate order passed should be reckoned as bad in law. 13. The NFAC, Delhi failed to appreciate that there was no proper opportunity given before passing of the impugned order and any order passed in violation of the principles natural justice would be nullity in law. 14. The Appellant craves leave to file additional grounds/arguments at the time of hearing." 3. The brief facts of the case emanating from the records are that the assessee is an individual carrying on the business in the name of Sri Sai Agency, as a trader in confectioneries and household goods. During the assessment year 2017-18, though the assessee had a turnover of Rs. 90,51,808/- had not filed the return of income. As per the information available with the department, the assessee had deposited cash of Rs. 17,53,400/- during the demonetization period into his bank account. Hence, the AO issued the notice u/s. 142(1) of the Act to file the vali....
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....sessee's turnover is less than Rs. 1.00 crore and eligible for declaring net profit on estimated basis u/s. 44AD of the Act and submitted that the assessee's case may be considered on merits. Pursuant to the remand report, the assessee filed a response on 14.07.2025 praying for estimating the profit at 8% on the entire turnover of Rs. 90,51,808/- after giving a eligible deduction under Chapter VIA of the Act. However, after going through the entire details the ld.CIT(A) stated that the expediency of VAT registration and later compliance by the assessee cannot be accepted as a sufficient evidentiary document to prove the deposit of SBNs and hence, dismissed the appeal of the assessee by confirming the order of the AO. 7. Aggrieved by the order of the ld.CIT(A), the assessee preferred an appeal before us. 8. Before us, the ld.AR of the assessee submitted that the assessee is a trader in confectionaries and house hold goods and has been regularly filing the return of income by declaring an income on presumptive basis u/s. 44AD of the Act. Further, the ld.AR filed a paper book consisting of 198 pages providing the details of return of income dated 15.11.2019, statement of income,....
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....l course of business, which are duly reflected in the turnover declared in the VAT returns. 12. We find that the assessee has placed on record VAT returns, evidencing a turnover of Rs. 90,51,808/-, which has not been disputed by the Revenue. Further, in the remand report, the AO has not brought any adverse material on record to disprove the explanation of the assessee and has, in fact, accepted that the assessee is eligible for computation of income under the presumptive provisions of section 44AD of the Act. The ld.AR has relied on certain judicial precedents to contend that where cash deposits during the demonetisation period are explained as arising from business receipts and are supported by regular books/returns, no addition u/s. 69A is warranted. We find considerable merit in this contention. 13. In the case of ACIT vs. Hirapanna Jewellers (ITA No. 253/Viz/2020 dated 12.05.2021), the Coordinate Bench of the Tribunal held that where the assessee is engaged in regular business and the cash deposits made during the demonetisation period are out of recorded sales duly reflected in the books, the same cannot be treated as unexplained income merely on account of timing of dep....