vk;djvihyh; vf/kdj.k] t;iqjU;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR JherhvUukiw.kkZxqIrk] ys[kk lnL; ,oaJhujsUnzdqekj] U;kf;dlnL; ds le{k BEFORE: SMT.ANNAPURNA GUPTA, AM & SHRI NARINDER KUMAR, JM, vk;djvihy l-a@ITA No. 1204/JPR/2025 fu/kZkj.ko"kZ@Assessment Years : 2017-18 cuke ITO, Damodar Prasad Agarwal, Vs. Ward-3(5), 16 NA, Behind Lata Cinema Jaipur Hall, Jhotwara, Jaipur LFkk;hys[kk la-@thvkbZvkj la-@

PAN/GIR No.: ABSPA 0762 E vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@

Assessee by : Sh. P.C. Parwal, FCA jktLo dh vksj ls Revenue by : Sh. Brij Lal Meena, Addl. CIT (thru. V.C.)

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Date of Hearing : 22/12/2025 mn?kks"k.kk dh rkjh[k@

Date of Pronouncement: 31 /12/2025 vkns'k@ORDER PER: ANNAPURNA GUPTA, AM The present appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (ld. CIT(A))/National Faceless Appeal Centre (NFAC), Delhi under Section 250 of the Income Tax Act, 1961, (hereinafter referred to as “Act”).

2. At the outset itself, it was stated that the solitary issue in the present appeal related to addition made to the income of the assessee on account of cash deposited in the bank account of the assessee during demonetization period from 9.11.2016 to 30.12.2016, remaining unexplained. The cash deposit so added to the income of the assessee by the Assessing Officer (AO) amounted to Rs.94,49,786/-, the addition being made as unexplained money u/s 69A of the Act.

3. The ld. CIT(A), it was pointed out, confirmed the findings of the AO that the cash deposited during the said period remained unexplained but at the same time considered the assessee’s argument that this cash deposit had already been accounted for in sales and profits thereon declared for taxation, thereforehe directed the AO to exclude the gross profit associated with these purported sales and accordingly recompute the addition to be made to the income of the assessee.

4. The AO, it was pointed out, had also levied tax on the addition so made to the income of the assessee u/s. 69A of the Act at the rate of 60% applying the provisions of Section 115BBE of the Act. This was also challenged before the ld. CIT(A) who confirmed the action of the AO.

5. Aggrieved by the above, the assessee has come up in appeal before us raising the following grounds:-

“1. The Ld. CIT(A), NFAC has erred on facts and in law in confirming the addition of Rs.81,19,256/- (94,49,786 -13,30,530) u/s 69A of IT Act by holding that cash deposit during the demonetization period is unexplained money by directing the AO that since the cash deposit have already been accounted for in sales and profits declared for taxation, the gross profit associated with these sales be excluded in making the addition.

2. The lower authorities have erred on facts and in law in taxing the alleged unexplained cash deposit in the bank account u/s 115BBE @ 60% instead of taxing the same @ 30% by ignoring that section 115BBE substituted by Taxation Laws (Second Amendment Act), 2016 which received the assent of President on 15.12.2016 and made applicable from 01.04.2017 is applicable to any transaction from 01.04.2017 onwards and not to any transaction prior to 01.04.2017 as held by Hon'ble Madras High Court in case of SMILE Microfinance Ltd. Vs. ACIT vide order dt. 19.11.2024.

3. The appellant craves to alter, amend and modify any ground of appeal.

4.Necessary cost be awarded to the assessee.”

6. Taking up first ground of appeal No.1 challenging the addition made to the income of the assessee on account of cash deposit in its bank during demonetization period, learned counsel for the assessee made arguments at length primarily contending that the entire addition was based merely on assumptions and presumptions and this despite the fact that the assessee had duly explained the source of cash deposits, had also satisfactorily explained the abnormalities noted by the AO in the financial figures of the ass