Unexplained cash deposits and section 115BBE amendment held subject to fresh factual verification and the unamended law

Cash deposits alleged to be unexplained income under section 69A were not finally upheld because the Tribunal found the factual record insufficient to verify whether the receipts had been contemporaneously recorded as professional income and whether the bank deposits were duly explained; the addition was therefore restored to the Assessing Officer for fresh factual examination. The Tribunal also held that the amendment to section 115BBE operated from 1 April 2017 and applied only from assessment year 2018-19 onwards, so the unamended provision would govern any addition for the relevant year. The assessee succeeded on the applicability of the amended provision.

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Issues: (i) Whether the cash deposits of Rs. 72,00,000 were correctly added as unexplained income under section 69A, and (ii) whether the amended section 115BBE could be applied for the relevant assessment year.

Issue (i): Whether the cash deposits of Rs. 72,00,000 were correctly added as unexplained income under section 69A.

Analysis: The dispute turned on whether the cash receipts claimed to have been recorded as professional receipts were in fact reflected in the books of account and whether the explanation for their deposit during the demonetisation period could be accepted on the available material. The Tribunal noted that the rival claims regarding contemporaneous recording, the nature of the receipts, and the link between the alleged professional receipts and the bank deposits had not been verified from the books and supporting details with sufficient factual certainty.

Conclusion: The matter was set aside to the Assessing Officer for fresh adjudication after factual verification.

Issue (ii): Whether the amended section 115BBE could be applied for the relevant assessment year.

Analysis: The Tribunal held that the amendment to section 115BBE was operative from 01.04.2017 and would apply from assessment year 2018-19 onwards. For the year in question, the unamended provision would govern any addition, if ultimately made in fresh proceedings.

Conclusion: The assessee's challenge to the application of the amended provision succeeded.

Final Conclusion: The appeal was allowed in part, the addition issue was restored for reconsideration, and the applicability of section 115BBE was confined to the unamended law for the relevant year.

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