ABHISHEK,V. ISMAILA ROHTAK vs. INCOME TAX OFFICER WARD 3, ROHTAK

Heard both the parties at length and perused the relevant records.

Brief facts of the case are that the assessee did not file his return of income during the year under consideration and made cash deposits of Rs. 13,15,000/- during the demonetization periods in his bank accounts maintained with HDFC Bank Ltd. During the assessment proceedings, the AO issued notices to the assessee enquiring about the sources of cash deposit. However, the assessee failed to respond to the notices. Therefore, the AO initiated the proceedings u/s. 144 of the Act. During the proceedings, the assessee made submission, however, the AO was not convinced with the same and he completed the assessment by making the addition of Rs. 13,15,000/- u/s. 69A of the Act and the same was also taxed u/s. 115BBE. However, in appeal, Ld. First Appellate Authority sustained the addition. Against the above, assessee appealed before the Tribunal.

At the time of hearing, Ld. AR has submitted that assessee is an agriculturist and having no other source of income other than agriculture and the assessee and his family owns about 13 acres of agricultural land, as per Farad Jamabandi in evidence of ownership of agricultural land, placed at page 10 and 11 of the Paper Book. In the assessment order, the AO made addition of Rs. 13,15,000/- on account of cash deposited in the bank account, during demonetization period. Since the source of income of the assessee i.e. agricultural income, is exempt from tax and there is other source of income which could generate unaccounted cash, no addition could be made or sustained for unexplained income. He further submitted that the assessee case is covered by the several judgements. He further submitted that the AO had also invoked Section 115BBE of the Act, however, ITAT Delhi in the case of Deepak Sharma, ITA nop. 2886/2022, following the judgment of the Madras High Court in the case of Smile Microfinance Ltd. WP(MD) No. 2078/2020 and 1742/2020 dated 19.11.2024, settled the issue against the department and held that the law applied to the transactions on or after 1.4.2017 and the instant case is related to assessment 2017-17, hence, the provisions of section 115BBE are not applicable to the present matter.