ALIKHAN MOHAMMAD,ADILABAD vs. ITO, WARD-1, NIRMAL

The brief facts of the case are that the assessee is an individual who filed his return of income for the assessment year 2017-18 on 25.09.2017, declaring total income of Rs. 3,34,580/-. The case of the assessee was selected for complete scrutiny and,

Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. Addl/JCIT(A). The Ld. Addl/JCIT(A) deleted the addition of Rs. 25,622/- made by the Assessing Officer on account of disallowance of expenditure; however, the addition of Rs. 12,92,305/- made under section 68 of the Act on account of unexplained cash credits was confirmed. Accordingly, the appeal of the assessee was partly allowed by the Ld. Addl/JCIT(A).

Aggrieved by the order of the Ld. Addl/JCIT(A), the assessee is in appeal before the Tribunal. Before us, the Ld. AR submitted that the only issue arising out of the grounds raised by the assessee is with regard to the addition of Rs. 12,92,305/- made by the Assessing Officer under section 68 of the Act on account of unexplained cash credits. In this regard, the Ld. AR submitted that the amount of Rs. 12,92,305/- represented advances received by the assessee against sales from 67 parties, the details of which have been reproduced by the Assessing Officer at page nos. 3 to 7 of the assessment order. Inviting our attention to the ledger accounts of all the 67 parties placed at page nos. 14 to 78 of the paper book, the Ld. AR submitted that the assessee had subsequently made

Per contra, the Ld. DR relied upon the orders of the lower authorities. Inviting our attention to the list of 67 parties from whom the assessee claimed to have received advances against sales, as reproduced by the Assessing Officer at page nos. 3 to 7 of the assessment order, the Ld. DR submitted that the amounts claimed to have been received from a large number of such parties were almost similar, generally ranging between Rs. 19,000/- and Rs. 20,000/-. The Ld. DR further submitted that, except for producing the ledger accounts of the alleged creditors, the assessee failed to furnish their PANs, returns of income or any other supporting evidence from which their identity, creditworthiness and the genuineness of the transactions could be verified. Therefore, the assessee had failed to discharge the onus cast upon him under section 68 of the Act. The Ld. DR further invited our attention to the ledger accounts placed at page nos. 14 to 78 of the paper book pertaining to the immediately succeeding financial year, wherein the assessee had shown sales to the said 67 parties. He submitted that ordinarily, where an advance is received against a proposed sale, the final amount of sale may be either higher or lower than the amount initially received as advance, depending

We have heard the rival submissions and perused the material available on record. The undisputed fact is that an amount aggregating to Rs. 12,92,305/- was found credited in the books of account of the assessee in the names of 67 parties. The assessee has explained these credits as advances received from the said parties against sales to be effected subsequently. It is also the contention of the assessee that sales were actually made to these parties in the immediately succeeding financial year and the advances were adjusted against such sales. In this regard, we have gone through the ledger accounts of all the 67 creditors for the financial year 2017-18 placed at page nos. 14 to 78 of the paper books, the contents of all the ledger accounts are identical. Therefore, for the sake of brevity, we are reproducing the copy of ledger account in one case, placed at page no. 14 of the paper book, as under:

On perusal of the above, we find that, except for the names and place of the creditors, no other particulars such as their postal addresses, PANs or other identification details have been provided therein. Further, before us also, the assessee has failed to furnish any documentary evidence in support of its claim so as to establish the identity and creditworthiness of the said persons and the genuineness of the transactions. Thus, except for the ledger accounts maintained by the assessee itself in the names of the aforesaid 67 parties, no independent evidence has been placed on record to establish that the amounts in question were actually received as advances against sales from the said parties. Mere entries in the books of account maintained by the assessee, by themselves, cannot establish the genuineness of the credits when even the basic particulars of the persons from whom such amounts are stated to have been received have not been furnished. We also find merit in the submission of the Ld. DR regarding the pattern of the transactions. The amounts claimed to have been received from a large number of the 67 parties are in a similar range of approximately between Rs. 19,000 to Rs. 20,000. Further, in all the cases, the amount has been received in cash. More importantly, on perusal of the ledger accounts for the immediately succeeding financial year placed at page nos. 14 to 78 of the paper book, we

In view of the above facts and circumstances, we are of the considered opinion that the assessee has failed to satisfactorily explain the nature and source of the credits of Rs. 12,92,305/- appearing in his books of account and has also failed to discharge the onus cast upon him under section 68 of the Act. We, therefore, find no infirmity in the order of the Ld. Addl/JCIT(A) confirming the addition of Rs. 12,92,305/- made by the Assessing Officer under

The assessee has also raised an alternative contention by way of an additional ground regarding the applicability of the enhanced rate of tax under section 115BBE of the Act. The assessee has challenged the levy of tax at increased rate of 60% under section 115BBE of the Act instead of 30% applicable for the year under consideration i.e. A.Y. 2017-18. We find that an identical issue has already been considered by this Tribunal in the case of Soma Shekhar Bingumalla Vs. ITO in ITA No. 76/Hyd/2026 for the assessment year 2017-18, dated 29.07.2026, wherein, at para nos. 18 to 21 of the order, the Tribunal has held as under:

On perusal of the above, we find that the Tribunal has considered the reliance placed by the assessee on the decision of the Hon’ble Rajasthan High Court in the case of Deepak Maratha Vs. Union of India & Others (supra) as well as the reliance placed by the Department on the decision of the Hon’ble Kerala High Court in the case of Maruti Babu Rao Vs. ACIT (supra), and ultimately held that the enhanced rate of 60% under section 115BBE of the Act is not applicable for the assessment year 2017-18. In the present case also, the assessment year under consideration is 2017-18. Therefore, respectfully following the aforesaid order of the Tribunal in the case of Soma Shekhar Bingumalla Vs. ITO (Supra), we hold that the enhanced rate of 60% under section 115BBE of the Act is not applicable to the assessment year under consideration. Accordingly, we direct the Assessing Officer to compute the tax liability of the assessee on the impugned addition by applying the rate of tax as applicable under the unamended provisions of section 115BBE of the Act.

In the result, the appeal of the assessee is partly allowed. Order pronounced in the Open Court on 21st August, 2026. Sd/- Sd/- (RAVISH SOOD) (MADHUSUDAN SAWDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, dated 21st August, 2026. Vinodan/sps