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Facts
The assessee, a doctor, filed her return declaring income. The AO made additions for unexplained cash deposits during demonetization, treating them as income under Section 115BBE. The CIT(A) upheld this.
Held
The Tribunal held that the CIT(A)'s action was incorrect. The assessee had explained the cash deposits as her accounted money from professional fees, which were deposited in the bank. Therefore, Section 115BBE was not applicable.
Key Issues
Whether cash deposits made during demonetization, explained as professional receipts, can be taxed under Section 115BBE as unexplained income.
Sections Cited
115BBE, 68
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Income Tax Appellate Tribunal, “B” BENCH, KOLKATA
Before: SHRI DUVVURU RL REDDY & SHRI RAJESH KUMAR
O R D E R Per Rajesh Kumar, AM :
is filed by the assessee against the order dated 22.09.2023, passed by the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2017-2018. is a duplication of ITA No.2307/KOL/2024.
At the outset we note that there is delay of 473 days in filing the appeal by the assessee.The ld counsel submitted that the assessee has filed the appeal against the appeal effect order passed by the ld. AO giving effect to the appellate order. This appeal is also listed today. The bench on the last hearing directed the bench that this appeal is not maintainable as the assessee should have filed the appeal against the order of appellate authority. Accordingly the appeal was filed by the assessee with a delay of 478 days for which the assessee can not be held responsible. Therefore considering the reasons to be bonafide and genuine , we are inclined to condone the delay. 3 First we shall take the appeal of the assessee in ITA No.2307/KOL/2024. The only issue raised by the assessee in Ground No.1 out of the various grounds of appeal
, is against the action of the ld. CIT(A) holding that the AO was justified in determining the tax payable by the assessee on the duly accounted for professional receipts of Rs.28,27,000/- as per Section 115BBE of the Act. Grounds No.2 & 3 are in support of the ground No.1.
4. Brief facts of the case are that the assessee is a doctor by profession and filed her return of income on 27.10.2017 declaring total income at Rs.71,29,150/-, which was selected for scrutiny. Subsequently the AO completed the assessment determining total income of the assessee at Rs.1,02,39,650/- after making two additions i.e addition u/s.68 of the Act and addition on account of capital expenditure of Rs.4,05,000/-.
5. In the appellate proceedings, the ld. CIT(A) observed that the assessee has deposited the cash during the demonetization period and in the Financial Year 2015-2016, the assessee’s receipt was Rs.6.63 lakhs and cash deposits were Rs.4,10,000/-. It was the observation of the ld. CIT(A) that the assessee has been periodically depositing the unutilised cash in bank. It was further observed by the ld.CIT(A) that the other factors relating to the reason for retention of cash in hand and its deposit after demonetization could not conclusively prove that the said deposit represents receipts of fees. Therefore, the ld. CIT(A) held that the source of cash deposit stood unexplained. Accordingly, upheld the addition made by the AO treating the same as unexplained income and also held the same is liable for taxation at the rate of 60% by virtue of provisions of Section 115BBE of the Act.
4. After hearing the rival contentions and perusing the material available on record, we find that the assessee is a doctor by profession. As per the AO the assessee has made cash deposits during demonetization period from 09.11.2016 to 31.12.2016 amounting to Rs.28,27,000/- appearing in the bank account of the assessee which remained unexplained u/s.68 of the Act and added the same to the total income. Accordingly the AO assessed the income of the assessee and taxed u/s.115BBE of the Act at the rate of 60%, which has also been confirmed by the ld. CIT(A). In our opinion, the said action of the CIT(A) is not correct as the assessee was having income from her medical profession only and the assessee has explained the same during the course of assessment proceedings that the fees were received in cash was only 1/3rd of total fees. In this regard, the assessee has also provided the cash receipt and deposit in the bank which has been tabulated by the AO in its order at page 5. Therefore, it is clear that the amount deposited in the bank account was her accounted money. Accordingly, we set aside the order of the ld. CIT(A) by holding that provisions of section 115BBE of the Act are not applicable in the assessee’s case. Thus, this appeal of the assessee in ITA No.2307/KOL/2024 is allowed.
With regard to ITA No.532/KOL/2025, at the outset, it was brought to our notice that this appeal is not maintainable and therefore may be dismissed as withdrawn. Accordingly we dismiss the same.
In the result, appeal of the assessee in ITA No.2307/KOL/2024 is allowed and ITA No.532/KOL/2025 is dismissed.
Order pronounced in the open court on 26/08/2025.