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Facts
The assessee, an NRI, challenged the addition of Rs. 7.50 lakhs as unexplained cash deposits under Section 69A read with Section 115BBE. The assessee claimed the deposits were from previous withdrawals from his NRE/NRO accounts, but failed to fully substantiate the source to the lower authorities.
Held
The tribunal partly allowed the appeal, reducing the unexplained cash deposit to Rs. 1 lakh, acknowledging the possibility of previous withdrawals. It also directed that Section 115BBE would not apply as the transaction occurred before April 1, 2017, and the assessment should be under normal provisions.
Key Issues
Whether cash deposits by an NRI could be treated as unexplained under Section 69A, and the applicability of Section 115BBE for transactions prior to April 1, 2017.
Sections Cited
Section 69A, Section 115BBE, Section 143(3)
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Income Tax Appellate Tribunal, DEHRADUN “DB” BENCH, DEHRADUN
Before: SHRI SATBEER SINGH GODARA & SHRI MANISH AGARWAL
ORDER
PER SATBEER SINGH GODARA, JM:
This assessee’s appeal for assessment year 2017-18, arises against the Commissioner of Income Tax (Appeals) [in short, the “CIT(A)”], Noida’s -2 order dated 12.06.2025 having DIN and order no. ITBA/APL/S/250/2025-26/1076962197(1), involving proceedings under sections 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.
Delay of 33 days in filing the asseessee’s instant appeal is condoned in larger interest of justice and in light of Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC).
We notice during the course of hearing that the assessee/appellant has raised his sole substantive grievance challenging correctness of both the learned lower authorities’ action treating his cash deposits amounting to Rs.7.50 lakhs as unexplained under section 69A r.w.s. 115BBE of the Act in assessment order dated 29.11.2019 as upheld in the lower appellate discussion. Both the parties vehemently reiterate their respective stands against and in support of the impugned addition.
That being the case, we are informed in light of the CIT(A)’s appeal order at page 8 that he is a Non-Resident India “NRI” employed in oil rig industry. And that he is stated to have withdrawn a minimum sum of Rs.10 lakhs in the relevant financial year from his NRE as well as NRO Account in November, 2016; as the case may be. We are of the considered view that even if the assessee has failed to discharge his onus of proving the source of the impugned cash deposits to the entire satisfaction of both the 2 | P a g e learned lower authorities, the necessary inference which would prima facie arise in his favour is that the impugned cash deposits represent his previous withdrawals whose credits could not be altogether denied as well. We thus deem it appropriate in the larger interest of justice that a lumpsum addition of Rs. 1 lakh only in the assessee’s hands would be just and proper with a rider that the same shall not treated as a precedent. The assessee gets relief of Rs.6.50 lakhs in other words. Necessary computation shall follow as per law.
So far as assessee’s assessment under section 115BBE is concerned, we quote S.M.I.L.E. Microfinance Ltd. Vs. ACIT, W.P. (MD) No.2078 of 2020 & 1742 of 2020, dated 19.11.2024 (Madras) that the impugned statutory provision would come into effect on the transaction done on or after 01.04.2017 only. The assessee is accordingly directed to be assessed under the normal provision as per law.