BANSI LAL KUMHAR,UDAIPUR vs. ACIT CIRCLE-2, UDAIPUR

Facts

The assessee made cash deposits of Rs. 34,50,000/- during the demonetization period, explaining the sources as rental income (Rs. 14,00,000/-), agricultural income (Rs. 20,00,000/-), and past savings (Rs. 3,60,000/-). The Assessing Officer (AO) and Commissioner of Income Tax (Appeals) [CIT(A)] rejected these explanations, treating the entire amount as unexplained cash credits under Section 68 of the Income Tax Act and applying tax rates under Section 115BBE.

Held

The Tribunal found that the assessee had provided sufficient documentary evidence and a history of declaring similar income to explain the sources of the cash deposits. It held that income already disclosed or plausibly explained cannot be treated as undisclosed income or subjected to double taxation. Therefore, the addition made under Section 68 and the application of Section 115BBE by the lower authorities were deemed infirm and perverse to the facts on record, leading to the deletion of the addition.

Key Issues

1. Whether cash deposits made during demonetization, explained as rental income, agricultural income, and past savings, can be treated as unexplained cash credits under Section 68. 2. Whether Section 115BBE is applicable when the assessee provides plausible explanations and evidence for the source of deposits.