ORDER

Per Manish Agarwal, Accountant Member:

The present appeal has been filed by the Revenue against the order dated 01.07.2025 passed by ld. CIT(A)/NFAC, Delhi in DIN & order No. ITBA/NFAC/S/250/2025-26/1078081236(1) passed u/s 250 of the Income Tax Act, 1961 (“the Act”) arising from the Assessment Order dated 16.12.2019 passed u/s 143(3) of the Act pertaining to assessment year 2017-18.

2. Brief facts of the case are that the assessee is a registered travel agent with IATA and engaged in the business of selling air travel tickets related to various airlines and also providing services of hotel and foreign tours to the customers. The return of income was e-filed on 30.10.2017 declaring total income at Rs. 1,48,57,830/- under normal provisions of the Act. The said return was revised on 06.06.2018 at the same income. Case of the assessee was selected for complete scrutiny wherein one of the reason was large value of cash deposited during demonetization period. The AO observed that assessee has deposited a sum of Rs.2,22,35,734/- during the demonetization period as per the form submitted, however later stage it was found that total cash deposited during demonetization period was of Rs.2,24,01,455/-. It was explained by the assessee that there was cash in hand of Rs.85,76,000/- in SBN as on the opening hours of 09.11.2016 that is the next day when the demonetization was announced by the Hon’ble Prime Minister and the balance amount was claimed as deposited by the portal agents and cash sales in new notes also. However, the AO had not accepted the contention of the assessee and made the addition for the differential amount of Rs.1,38,25,455/- (2,24,01,455-85,76,000) u/s 68 of the Act as an explained cash credit.

3. In first appeal, vide order dated 01.07.2025, ld. CIT(A) has deleted the addition, therefore, the Revenue is in appeal before the Tribunal. Solitary ground of the appeal of the Revenue is with respect to the deletion of the addition of Rs.1,38,25,455/- made u/s 68 on account of cash deposit during demonetization period.

4. Before us, ld. Sr. DR vehemently supported the order of the AO and submits that the order of ld. CIT(A) is non-speaking order wherein no reasons were stated by ld. CIT(A) for deleting the additions made by AO. He further submits that the AO has discussed the issue in detail and has referred the chart in para 9 of the Assessment Order according to which the cash deposited in SBN during demonetization was comparatively much higher than the deposits made during the relevant period in preceding year. He therefore requested for the restoration of the additions so made by the AO.

5. On the other hand, ld. AR for the assessee vehemently supported the order of the ld. CIT(A) and filed written submission which reads as under:

“This appeal has been filed by the department against the order passed by the learned CIT(A) for the Assessment Year 2017-18 dated 01.07.2025 vide which the learned CIT(A) has deleted the additions made by the learned Assessing Officer u/s 68 r.w.s. 115BBE of the Income Tax Act on account of alleged unexplained cash deposited into the bank accounts of the assessee during the demonetization period i.e. period from 08.11.2016 to 30.12.2016.

The facts in brief are that the assessee is a company which is engaged in the business of a travel house duly registered with IATA and is engaged in the business of selling air travel tickets and other related services for various airlines through the medium of various sub agents spread throughout the country.

The learned Assessing Officer in Para-6 of his order noted that during the year under consideration, there was an abnormal increase in the cash deposit during the demonetization period as compared to the corresponding period of the immediate preceding year. The learned Assessing Officer issued notices to the banks u/s 133(6) of the Income Tax Act and called for the details of amounts deposited in various banks during the demonetization period.

The