TaxTMI 
TaxTMI 
2026 (6) TMI 1176
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....f the Income-tax Act, 1961 [hereinafter referred to as "the Act"] by the Assessing Officer, Assessment Unit, National Faceless Assessment Centre, Delhi [hereinafter referred to as "the AO"] pertaining to the Assessment Year 2017-18. 2. The brief facts of the case, as borne out from the assessment records, are that the assessee is an individual engaged in the business of running a hotel under the proprietary concern namely "M/s.G.V.Hotel". For the year under consideration, the assessee had not furnished his return of income within the time prescribed under the Act. Subsequently, based on information available with the Department, it was noticed that substantial cash deposits aggregating to Rs. 97,34,082/- had been made in the bank account....
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..... The reassessment was consequently completed u/s. 147 of the Act vide order dated 04.03.2025 determining the total income of the assessee at Rs. 9,68,650/-. 6. Being aggrieved by the aforesaid addition, the assessee preferred an appeal before the Ld.CIT(A). The Ld.CIT(A), after considering the submissions advanced by the assessee and examining the material available on record, vide appellate order dated 27.01.2026 dismissed the appeal and upheld the action of the AO in making the addition of Rs. 5,41,000/- u/s. 69A r.w.s 115BBE of the Act. 7. At the time of hearing before us, the Ld.AR appearing on behalf of the assessee assailed the orders of the lower authorities. At the outset, the Ld.AR submitted that the impugned addition, even ....
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....h deposits or the claim that the impugned account pertained to agricultural operations jointly carried on by the family members. The Ld.DR contended that the explanation offered by the assessee remained unsubstantiated and unsupported by contemporaneous records. The Ld.DR therefore argued that the AO was fully justified in treating the cash deposits of Rs. 5,41,000/- as unexplained money u/s. 69A of the Act and bringing the same to tax u/s. 115BBE of the Act. Accordingly, the Ld.DR prayed that the order of the Ld.CIT(A) confirming the addition be upheld. 10. We have carefully considered the rival submissions advanced by both sides, perused the orders of the authorities below and examined the material available on record. The issue that a....
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....ting the nature and character of the account itself. 13. At this juncture, it would be relevant to note that the account in which the impugned deposits were made is admittedly an agricultural overdraft account sanctioned by the bank. Such facilities are ordinarily extended by banking institutions for the benefit of agriculturists and are linked to agricultural land holdings and farming activities. Therefore, the very nature of the account lends support to the contention of the assessee that agricultural operations were being carried on by the account holders. In our considered view, the existence of an agricultural overdraft account cannot be lightly brushed aside while examining the source of deposits made therein. It constitutes an imp....
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....on regarding agricultural activities carried on by the family create a reasonable probability that at least a portion of the deposits represented genuine agricultural receipts. 16. We further find that the Revenue has not brought any positive material on record to demonstrate that the impugned deposits represented income from any undisclosed business activity, clandestine transactions or any other identified source of taxable income. No independent enquiry appears to have been conducted by the AO to rebut the claim regarding agricultural operations. The addition has essentially been made on account of insufficiency of evidence rather than on the basis of any contrary material unearthed by the Department. Therefore, in our considered opin....
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.... dated 19.11.2024. 19. We have carefully gone through the aforesaid judgment. The Hon'ble Madras High Court, while examining the scope and applicability of the amendment brought to section 115BBE by the Taxation Laws (Second Amendment) Act, 2016, has categorically held that the enhanced rate of taxation introduced through the said amendment would have prospective operation and would apply only in respect of transactions undertaken on or after 01.04.2017. The Hon'ble Court further held that the amended provisions would not govern Assessment Year 2017-18. The ratio laid down by the Hon'ble Jurisdictional High Court is binding upon us and deserves to be followed. 20. Respectfully following the aforesaid decision, we hold that....