Specified bank notes received before the appointed day cannot alone support an unexplained money addition under section 69A.

Specified bank notes received and deposited before the appointed day under the Specified Bank Notes (Cessation of Liabilities) Act, 2017 could not, by that fact alone, be treated as unexplained money under section 69A. The appointed day was 31.12.2016, and the statutory bar on holding, transferring or receiving such notes operated only on and from that date; receipt during 09.11.2016 to 11.11.2016 was therefore not unlawful on the reasoning applied. Following coordinate bench decisions on identical facts, the Tribunal deleted the addition and held that consequential invocation of section 115BBE could not be sustained.

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Issues: Whether the addition of Rs. 4,74,000 as unexplained money under section 69A, with consequential invocation of section 115BBE, was sustainable in respect of specified bank notes received before the appointed day under the Specified Bank Notes (Cessation of Liabilities) Act, 2017.

Analysis: The assessee had received and deposited specified bank notes during 09.11.2016 to 11.11.2016. The statutory scheme of the Specified Bank Notes (Cessation of Liabilities) Act, 2017 fixes the appointed day as 31.12.2016, and section 5 bars holding, transferring or receiving specified bank notes only on and from that appointed day. On that footing, the receipt of such notes before 31.12.2016 could not be treated as unlawful so as to sustain an addition as unexplained money. The Tribunal followed its coordinate bench decisions on identical facts and found no contrary material from the Revenue.

Conclusion: The addition of Rs. 4,74,000 was deleted and the issue was decided in favour of the assessee.

Ratio Decidendi: Specified bank notes remained legally cognizable until the appointed day under the 2017 Act, and their receipt before that date cannot, by itself, be treated as unexplained money under section 69A.

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