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Facts
The assessee appealed against an addition of Rs. 12,16,500/- made as unexplained cash deposits during the demonetization period for AY 2017-18 under Section 69A read with Section 115BBE, despite evidence of agricultural land ownership suggesting the deposits were *prima facie* agricultural income.
Held
The Tribunal acknowledged the *prima facie* agricultural income nature of the deposits and restricted the addition from Rs. 12,16,500/- to Rs. 1,00,000/-, granting a relief of Rs. 11,16,500/-. It also noted, citing a Madras High Court ruling, that Section 115BBE applies to transactions on or after 01.04.2017.
Key Issues
The key issues were the validity of treating cash deposits during demonetization as unexplained income under Sections 69A and 115BBE when attributed to agricultural income, and the correct effective date for the applicability of Section 115BBE.
Sections Cited
144, 69A, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. Satbeer Singh Godara
Date of Hearing: 21.04.2025 Date of Pronouncement: 21.04.2025 ORDER This assessee’s appeal for Assessment Year 2017-18, arises against the CIT(A)/NFAC, Delhi’s DIN & Order No. ITBA/NFAC/S/250-2024-25/1063318026(1) dated 25.03.2024, in proceedings u/s 144 of the Income Tax Act, 1961 (in short “the Act”).
Case called twice. None appears at the assessee’s behest. It is accordingly proceeded ex-parte.
It is noticed that during the course of hearing with the able assistance coming from the Revenue side both the lower authorities 2 have treated the assessee’s entire cash deposits of Rs. 12,16,500/-, during demonetization period, as unexplained u/s. 69A read with section 115BBE of the Act. The Revenue could hardly dispute the clinching fact that the CIT(A)/NFAC’s detailed discussions in para 5.2 of his order that the assessee owns and possess 20 acres of agricultural lands. That being the case, it could be safely concluded that the impugned cash deposits, although not satisfactorily reconciled, prima facie represent the assessee’s agricultural income only wherein cash component could not be altogether denied. It is thus deemed appropriate in the larger interest of justice to restrict the impugned addition of Rs. 12,16,500/- to a lumsum figure of Rs. 1,00,000/- only with a rider that the same shall not be treated as precedent. The Assessee gets relief of Rs. 11,16,500/- in very terms. Necessary computation shall follow as per law.
So far as the assessee’s assessment u/s 115BBE is concerned, Hon’ble Madras High Court in SMILE Microfinance Ltd. Vs. ACIT, W.P. (MD) No. 2078 of 2020 & 1742 of 2020 dated 19.11.2024 (Mad.) has already settled the issue against the department that the law applies to the transaction on or after 01.04.2017 only.
3 5. This assessee’s appeal is partly allowed in above terms. Order Pronounced in the Open Court on 21/04/2025.