Unexplained cash deposits and section 115BBE: Tribunal allowed partial relief and required computation under normal tax provisions.

Cash deposits during demonetisation were not treated as wholly unexplained where the assessee produced return filings, declared cash balance and prior withdrawals; the Tribunal therefore restricted the addition to a lump sum estimate instead of sustaining the entire amount. Section 115BBE was held inapplicable to the assessed transactions because its operative reach was confined to transactions on or after 01.04.2017, so the computation had to be made under the normal provisions of the Income-tax Act. The appeal succeeded only in part, with partial relief on the unexplained income issue and the special tax treatment displaced.

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Issues: (i) Whether the cash deposits made during demonetisation were fully liable to be treated as unexplained income; (ii) Whether the assessed amount was chargeable under section 115BBE of the Income-tax Act, 1961.

Issue (i): Whether the cash deposits made during demonetisation were fully liable to be treated as unexplained income.

Analysis: The assessee produced return filings and supporting material showing declared cash balance and past withdrawals. The lower authorities' view that the deposits remained wholly unexplained was found too rigid in the facts, though the explanation was not accepted in full.

Conclusion: The addition was restricted to a lump sum of Rs. 1,73,892, granting partial relief to the assessee.

Issue (ii): Whether the assessed amount was chargeable under section 115BBE of the Income-tax Act, 1961.

Analysis: The Tribunal accepted the settled position that section 115BBE applies only to transactions on or after 01.04.2017 and directed the consequential computation to be made under the normal provisions.

Conclusion: The assessment under section 115BBE was set aside and the matter was directed to be computed under the normal provisions of the Act.

Final Conclusion: The appeal succeeded only in part, with the addition reduced and the special taxation under section 115BBE displaced in favour of computation under the normal provisions.

Ratio Decidendi: Where cash deposits are not fully disproved but the assessee shows some credible source support from earlier savings or withdrawals, the addition may be restricted on a reasoned estimate, and section 115BBE cannot be applied to transactions outside its operative temporal reach.

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