2025 (12) TMI 529 - AT - Income Tax

Appeal partly allowed on s.68 cash deposits; s.115BBE applies only post-2017; tax recomputed normally accordingly

Tribunal partly allowed the assessee's appeal concerning addition under s. 68 on cash deposits made during demonetization. It held that the assessee ... Addition u/s 68 - cash deposits during demonetization unexplained and liable to be assessed u/s 115BBE - HELD THAT:- Assessee has not discharged her onus to explain the cash deposits to the entire satisfaction of both the learned lower authorities. Be that as it may, this tribunal is of the considered view that benefit of accumulated past savings and withdrawals etc. could not be altogether denied as well. It is thus deemed appropriate that a lump sum addition only in the given facts would be just and proper with a rider that the same shall not be treated as a precedent. The assessee gets relief of Rs. 4 lakhs in other words. Necessary computation shall follow as per law. Assessment u/s 115BBE - Revenue could hardly dispute that hon’ble Madras high court in SMILE Microfinance Ltd [2024 (11) TMI 1444 - MADRAS HIGH COURT] has already settled the issue that Section 115BBE applies on transactions on or after 01.04.2017 only. Direct the AO to finalize the consequential computation under normal provisions than u/s 115BBE of the Act in very terms. Appeal concerned addition of cash deposits during demonetization and application of section 115BBE for A.Y. 2017-18. There was a delay of 208 days in filing the appeal. Relying on Collector Land Acquisition v. Mst. Katiji (167 ITR 471), the tribunal condoned the delay to 'do substantial justice' and proceeded on merits. The assessee challenged the treatment of cash deposits of Rs. 5,73,892/- as unexplained and taxable u/s 115BBE. The record showed income tax returns and computations from A.Y. 2015-16 onwards reflecting sufficient cash balance. However, the assessee failed to fully discharge the onus of explaining the specific cash deposits to the satisfaction of the authorities. The tribunal nonetheless held that 'benefit of accumulated past savings and withdrawals etc. could not be altogether denied,' and made a lump-sum addition of Rs. 1,73,892/-, granting relief of Rs. 4,00,000/-, with a specific rider that this should not be treated as a precedent. On section 115BBE, following SMILE Microfinance Ltd. v. ACIT (Madras High Court), it held that section 115BBE 'applies on transactions on or after 01.04.2017 only,' directing computation under normal provisions instead of section 115BBE. The appeal was partly allowed.