Section 68 cannot tax already disclosed fee receipts again merely because they were deposited in cash during demonetisation.

Cash deposits made by an educational society during demonetisation could not be assessed as unexplained cash credits under section 68 where the receipts were already recorded in the books and disclosed in the return as gross receipts. The society substantiated the deposits with cash book entries, fee records, course details and other documents, showing that the money represented fee collections already accounted for as income. On those facts, mere deposit of the same receipts in cash during the demonetisation period did not justify a fresh addition or trigger taxation under section 115BBE. The ITAT Delhi held that the addition was unsustainable and granted relief.

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Issues: Whether cash deposits made by an educational society during the demonetisation period, being receipts already reflected in the books and returned as gross receipts, could be assessed as unexplained cash credits under section 68 of the Income-tax Act, 1961 and taxed under section 115BBE of the Income-tax Act, 1961.

Analysis: The assessee was a registered society engaged in education and enjoyed exemption status. The cash deposits were explained as fee collections and were supported by the cash book, fee records, course details and other documentary evidence. The receipts had already been disclosed as gross receipts in the return of income and in the books of account. On these facts, the addition was made only because of the pattern and quantum of cash deposited during the demonetisation period. The governing principle applied was that section 68 does not apply where the receipts are already disclosed as income or gross receipts of a charitable entity, and the same income cannot be brought to tax again merely because it was deposited in cash.

Conclusion: The addition under section 68 and the consequential application of section 115BBE were not sustainable, and the relief was granted to the assessee.

Ratio Decidendi: Where a charitable or educational has already disclosed receipts as income or gross receipts in its books and return, section 68 cannot be invoked again merely because those receipts were later deposited in cash in the bank account.

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