For one year the department accepted 8 per cent presumptive profit on my client's crypto sales; for the next year, on the same information, it has added the whole purchase figure under section 69C. Can it do that?
Not on this decision. The Ahmedabad Bench held that where the same assessment unit had, for AY 2017-18, accepted a presumptive deemed profit at 8 per cent of the crypto sales, it could not for AY 2018-19 — reopened on the same common information and where the assessee had again offered 8 per cent of his crypto turnover, which the Assessing Officer accepted — go on to add the crypto purchases of Rs 17,52,838 as unexplained expenditure under s.69C. Taking inconsistent stands in the assessee's own case in two different assessment years was held not proper and against the provisions of law, and the addition was deleted.
Decided by the ITAT (Dr. B.R.R. Kumar, Vice President and Shri T.R. Senthil Kumar, Judicial Member) on 2026-02-25, reported as ITA No. 1806/Ahd/2025 (Income Tax Appellate Tribunal, Ahmedabad, 'SMC' Bench); assessment year 2018-19; heard 11 February 2026, pronounced 25 February 2026. It bears on section 69C, section 115BBE, section 147, section 148, section 148A, section 144B of the Income Tax Act 1961, in Crypto & Virtual Digital Assets, Presumptive Taxation & Audit and Reassessment & Reopening matters.
For any year before AY 2023-24 there is no s.115BBH, and the head of income for crypto dealing is open. In practice the department has taken two positions in the same breath — accepting a presumptive business profit on the turnover and separately treating the purchases as unexplained expenditure — and this decision holds that it cannot have both. The reasoning is a consistency point rather than a ruling that crypto trading is business income, and it should be pleaded as such: the taxpayer's leverage comes from the department's own earlier acceptance in his case, not from any general proposition. Note the underlying arithmetic, because it is the reason the double assessment is objectionable: if 8 per cent of a turnover of Rs 29,01,111 is accepted as the profit, the balance of the turnover is by definition the cost of the coins, and the same money cannot at once be recycled purchase consideration and unexplained expenditure. The assessee also made the point, recorded in the order, that the reopening for both years rested on common information from the investigation wing which did not even carry the name of the currency, the broker, the dates, the quantities or the individual transaction amounts — an argument about the quality of the information that is worth taking in every one of these matters. A later year on the same facts would fall under s.115BBH, where the presumptive route is not available at all, so this decision has no application from AY 2023-24 onwards.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee's cases for AY 2017-18 and AY 2018-19 were reopened together under s.148 on common information from the investigation wing about cryptocurrency transactions. For AY 2017-18 the assessment was completed by accepting the assessee's own offer of Rs 39,696 as deemed profit at 8 per cent of crypto sales of Rs 4,96,195 in FY 2016-17, and that amount was added to his business income. For AY 2018-19 the assessee similarly offered Rs 2,32,089, being 8 per cent of a declared crypto turnover of Rs 29,01,111, which the Assessing Officer accepted; but the Assessing Officer went on to hold that the source of the crypto purchases of Rs 17,52,838 remained unexplained and added that amount as unexplained expenditure under s.69C, taxed at the special rate under s.115BBE. The CIT(A) (NFAC, Delhi), by an ex parte order dated 29 July 2025, upheld the addition, holding that the assessee's assertion that the purchases were funded from previous sale proceeds was uncorroborated and unsupported by trading ledgers, broker account statements or a bank trail, and that invoking s.115BBE on income deemed under s.69C was unobjectionable on CIT v. Fakir Mohmed Haji Hasan [2001] 247 ITR 290 (Guj). The assessee had also submitted that the two years were reopened on common information which did not disclose the name of the cryptocurrency, the broker's details, the dates of purchase or sale, the quantities or the amounts of individual transactions.
The appeal was allowed and the addition of Rs 17,52,838 was deleted. Where the Revenue had accepted presumptive deemed profit at 8 per cent on the crypto sales in the assessee's own case for AY 2017-18, it could not for AY 2018-19 accept the same presumptive offer and simultaneously add the crypto purchases as unexplained expenditure; taking inconsistent stands in the assessee's own case in two different assessment years is not proper and is against the provisions of law.
Counsel's argument, which the Bench accepted, was that the very same assessment unit had for AY 2017-18 — a year also reopened by notice under s.148 — accepted the presumptive deemed profit at 8 per cent of the crypto sales of Rs 4,96,195 relating to FY 2016-17, and that having accepted profit from cryptocurrency transactions as presumptive income for that year it ought to have adopted the same course for AY 2018-19, where the assessee had offered deemed income of Rs 2,32,089 being 8 per cent of the crypto sold during the year. The Assessing Officer's own order recorded that he had accepted that presumptive offer, while treating the purchase figure as separately unexplained. The Bench held that inconsistent stands taken by the Revenue in the assessee's own case across two assessment years were not proper and were against the provisions of law, and deleted the addition. The Bench gave a second reason in the same paragraph: the very same assessment unit that had accepted the returned income for AY 2017-18 by order dated 28 April 2023 had, for AY 2018-19, made the addition 'clearly unjustifiable and without assigning reasons thereof'.
Thus inconsistent stands are taken by the Revenue in assessee's own case in two different assessment years, which in our considered view is not proper and against the provisions of law.
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Handle my notice → Ask a CA on WhatsAppNot on this decision. The Ahmedabad Bench held that where the same assessment unit had, for AY 2017-18, accepted a presumptive deemed profit at 8 per cent of the crypto sales, it could not for AY 2018-19 — reopened on the same common information and where the assessee had again offered 8 per cent of his crypto turnover, which the Assessing Officer accepted — go on to add the crypto purchases of Rs 17,52,838 as unexplained expenditure under s.69C. Taking inconsistent stands in the assessee's own case in two different assessment years was held not proper and against the provisions of law, and the addition was deleted. This was decided by the ITAT (Dr. B.R.R. Kumar, Vice President and Shri T.R. Senthil Kumar, Judicial Member) and bears on section 69C, section 115BBE, section 147, section 148, section 148A, section 144B of the Income Tax Act 1961. It is reported as ITA No. 1806/Ahd/2025 (Income Tax Appellate Tribunal, Ahmedabad, 'SMC' Bench); assessment year 2018-19; heard 11 February 2026, pronounced 25 February 2026. For any year before AY 2023-24 there is no s.115BBH, and the head of income for crypto dealing is open. In practice the department has taken two positions in the same breath — accepting a presumptive business profit on the turnover and separately treating the purchases as unexplained expenditure — and this decision holds that it cannot have both. The reasoning is a consistency point rather than a ruling that crypto trading is business income, and it should be pleaded as such: the taxpayer's leverage comes from the department's own earlier acceptance in his case, not from any general proposition. Note the underlying arithmetic, because it is the reason the double assessment is objectionable: if 8 per cent of a turnover of Rs 29,01,111 is accepted as the profit, the balance of the turnover is by definition the cost of the coins, and the same money cannot at once be recycled purchase consideration and unexplained expenditure. The assessee also made the point, recorded in the order, that the reopening for both years rested on common information from the investigation wing which did not even carry the name of the currency, the broker, the dates, the quantities or the individual transaction amounts — an argument about the quality of the information that is worth taking in every one of these matters. A later year on the same facts would fall under s.115BBH, where the presumptive route is not available at all, so this decision has no application from AY 2023-24 onwards. If it applies to you, the first step is this: Pull the assessment records for every year the department has looked at, and identify precisely what treatment it accepted in each; the consistency argument only works if you can show the earlier acceptance in the same assessee's own case.
The assessee's cases for AY 2017-18 and AY 2018-19 were reopened together under s.148 on common information from the investigation wing about cryptocurrency transactions. For AY 2017-18 the assessment was completed by accepting the assessee's own offer of Rs 39,696 as deemed profit at 8 per cent of crypto sales of Rs 4,96,195 in FY 2016-17, and that amount was added to his business income. For AY 2018-19 the assessee similarly offered Rs 2,32,089, being 8 per cent of a declared crypto turnover of Rs 29,01,111, which the Assessing Officer accepted; but the Assessing Officer went on to hold that the source of the crypto purchases of Rs 17,52,838 remained unexplained and added that amount as unexplained expenditure under s.69C, taxed at the special rate under s.115BBE. The CIT(A) (NFAC, Delhi), by an ex parte order dated 29 July 2025, upheld the addition, holding that the assessee's assertion that the purchases were funded from previous sale proceeds was uncorroborated and unsupported by trading ledgers, broker account statements or a bank trail, and that invoking s.115BBE on income deemed under s.69C was unobjectionable on CIT v. Fakir Mohmed Haji Hasan [2001] 247 ITR 290 (Guj). The assessee had also submitted that the two years were reopened on common information which did not disclose the name of the cryptocurrency, the broker's details, the dates of purchase or sale, the quantities or the amounts of individual transactions. The matter was decided on 2026-02-25 by the ITAT (Dr. B.R.R. Kumar, Vice President and Shri T.R. Senthil Kumar, Judicial Member). On those facts the ITAT held as follows. The appeal was allowed and the addition of Rs 17,52,838 was deleted. Where the Revenue had accepted presumptive deemed profit at 8 per cent on the crypto sales in the assessee's own case for AY 2017-18, it could not for AY 2018-19 accept the same presumptive offer and simultaneously add the crypto purchases as unexplained expenditure; taking inconsistent stands in the assessee's own case in two different assessment years is not proper and is against the provisions of law.
Counsel's argument, which the Bench accepted, was that the very same assessment unit had for AY 2017-18 — a year also reopened by notice under s.148 — accepted the presumptive deemed profit at 8 per cent of the crypto sales of Rs 4,96,195 relating to FY 2016-17, and that having accepted profit from cryptocurrency transactions as presumptive income for that year it ought to have adopted the same course for AY 2018-19, where the assessee had offered deemed income of Rs 2,32,089 being 8 per cent of the crypto sold during the year. The Assessing Officer's own order recorded that he had accepted that presumptive offer, while treating the purchase figure as separately unexplained. The Bench held that inconsistent stands taken by the Revenue in the assessee's own case across two assessment years were not proper and were against the provisions of law, and deleted the addition. The Bench gave a second reason in the same paragraph: the very same assessment unit that had accepted the returned income for AY 2017-18 by order dated 28 April 2023 had, for AY 2018-19, made the addition 'clearly unjustifiable and without assigning reasons thereof'. In the words reproduced by the source cited on this page: "Thus inconsistent stands are taken by the Revenue in assessee's own case in two different assessment years, which in our considered view is not proper and against the provisions of law."
It was decided by the ITAT on 2026-02-25 and is reported as ITA No. 1806/Ahd/2025 (Income Tax Appellate Tribunal, Ahmedabad, 'SMC' Bench); assessment year 2018-19; heard 11 February 2026, pronounced 25 February 2026. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 69C, section 115BBE, section 147, section 148, section 148A, section 144B, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The appeal was allowed and the addition of Rs 17,52,838 was deleted. Where the Revenue had accepted presumptive deemed profit at 8 per cent on the crypto sales in the assessee's own case for AY 2017-18, it could not for AY 2018-19 accept the same presumptive offer and simultaneously add the crypto purchases as unexplained expenditure; taking inconsistent stands in the assessee's own case in two different assessment years is not proper and is against the provisions of law. It arises in Crypto & Virtual Digital Assets, Presumptive Taxation & Audit and Reassessment & Reopening matters, on section 69C, section 115BBE, section 147, section 148, section 148A, section 144B of the Income Tax Act 1961, and was decided by Dr. B.R.R. Kumar, Vice President and Shri T.R. Senthil Kumar, Judicial Member. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Where the department has accepted a presumptive percentage on turnover, resist any separate addition of the purchase leg under s.69C or s.69 — the cost is already embedded in the presumptive computation. Attack the information itself where it is thin: ask what asset, which broker, what dates, what quantities and what individual amounts, as the assessee did here. Keep the years straight — this reasoning is available only for assessment years before AY 2023-24; from AY 2023-24 s.115BBH governs and no presumptive treatment of VDA income is possible. Where a bank or exchange trail exists linking sales proceeds to later purchases, put it on record; the CIT(A)'s stated objection here was that the claim of purchases from earlier sale proceeds was uncorroborated by trading ledgers, broker statements or a bank trail. Do not read this order as authority that crypto gains are business income; it decides consistency, not characterisation. Take the s.115BBE point as well as the s.69C point: where the addition is deemed income under s.69C the department will apply the sixty per cent rate under s.115BBE, and here the CIT(A) upheld that on CIT v. Fakir Mohmed Haji Hasan. The Tribunal deleted the s.69C addition and so never reached s.115BBE, which means this order is no authority on it.
Validity check could not be completed. Validity check could not be completed. Decided 25 February 2026; I did not check for an appeal or for any later or contrary decision. The reasoning is a consistency holding on the Revenue's conduct across two years and is not authority on the head of income under which pre-regime cryptocurrency gains fall; and it has no application from AY 2023-24, when s.115BBH takes over. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The complete verbatim order was subsequently retrieved in one fetch from https://indiankanoon.org/doc/4657017/?type=print using the government-work framing, and everything below is written from the full text. Two things the full text adds. First, the CIT(A) upheld the addition not only under s.69C but by applying the special rate under s.115BBE, relying on CIT v. Fakir Mohmed Haji Hasan [2001] 247 ITR 290 (Guj); ground 7 before the Tribunal challenged the s.115BBE levy, and because the Tribunal deleted the s.69C addition outright it never reached that ground, so this order decides nothing about s.115BBE. Second, the Tribunal gives a second reason at para 8 alongside the consistency reason: the addition was 'clearly unjustifiable and without assigning reasons thereof'. There is a slip in para 7, where the order writes 'for the Asst. Year 2017-18' in the clause about the Rs 2,32,089 offered on sales of Rs 29,01,111, which plainly belongs to AY 2018-19. Two figures conflict in the report: the profit accepted for AY 2017-18 appears as 'Rs. 39,696/-' in the extract from the assessment order and as 'Rs.39,686/-' in the extract of counsel's submission, a difference of Rs 10 that the order does not reconcile; I have used Rs 39,696 and flagged it. The bench is headed 'AHMEDABAD "SMC" BENCH' although two members sat, Dr. B.R.R. Kumar (Vice President) and Shri T.R. Senthil Kumar (Judicial Member). The signature block prints 'VICE PRESIDENT True Copy' under Dr. Kumar's name, an artefact of the scan. I did not see the order name s.44AD or any other presumptive provision expressly — the text I read says only 'applying presumptive provisions of Income Tax Act, 1961' — so no presumptive section is listed in 'sections'. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The appeal was allowed and the addition of Rs 17,52,838 was deleted. Where the Revenue had accepted presumptive deemed profit at 8 per cent on the crypto sales in the assessee's own case for AY 2017-18, it could not for AY 2018-19 accept the same presumptive offer and simultaneously add the crypto purchases as unexplained expenditure; taking inconsistent stands in the assessee's own case in two different assessment years is not proper and is against the provisions of law.
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