Unexplained cash deposits under section 69A taxed as business turnover at 3.5% profit rate, not under section 115BBE

ITAT Surat held that unexplained cash deposits under section 69A should be treated as business turnover and taxed at estimated profit rate of 3.5% under normal tax rates, not under section 115BBE. The tribunal noted no change in assessee's business circumstances from previous assessment year 2013-14 where similar treatment was accepted by Revenue. Additionally, TDS credit on fixed deposit interest was allowed to the assessee in accordance with law.

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Issues Involved:
The issues involved in this judgment include the assessment year 2017-18, additions made under sections 69A and 69 of the Income Tax Act, 1961, interest on bank F.D., tax implications under section 115BBE, TDS credit on interest on Fixed Deposit, and interest charged under sections 234A and 234B of the Act.

Summary of the judgment:
The appeal filed by the assessee challenged the order passed by the National Faceless Appeal Centre, Delhi, arising from an assessment order by the Assessing Officer under section 144 of the Income Tax Act, 1961.

The grounds of appeal raised by the assessee included challenging the dismissal of the appeal, sustaining additions made under sections 69A and 69 of the Act, interest on bank F.D., tax implications under section 115BBE, TDS credit on interest on Fixed Deposit, and interest charged under sections 234A and 234B of the Act.

The Assessing Officer found that the cash deposited during demonetization raised doubts on its source, leading to additions under section 69A. The CIT(A) confirmed the Assessing Officer's decision, prompting the appeal.

The Tribunal noted that the assessee's case was similar to a previous assessment year where additions were made at a certain percentage on cash deposits. Consequently, the Tribunal directed the Assessing Officer to tax the cash deposits at 3.5% as part of the turnover.

Regarding the TDS credit on interest on Fixed Deposit, the Tribunal directed the Assessing Officer to allow the credit in accordance with the law.

The Tribunal deemed the interest charged under sections 234A and 234B as consequential and did not require further adjudication.

In conclusion, the appeal was partly allowed, with specific directions given for the treatment of cash deposits, TDS credit, and the interest charged under sections 234A and 234B of the Act.

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