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2024 (6) TMI 1290 - AT - Income TaxIssues Involved: 1. Cash deposit treated as unexplained cash deposits. 2. Application of Section 115BBE. 3. Consideration of opening cash balance. Analysis: Issue 1: Cash deposit treated as unexplained cash deposits - The assessee, a farmer, deposited cash during demonetization which was added to total income by the Assessing Officer. - The Assessing Officer observed frequent cash withdrawals despite substantial cash in hand, indicating unavailability of cash. - The Assessing Officer added the cash deposit to total income and taxed it at 60% under Section 115BBE, initiating penalty proceedings. - The CIT(A) considered bank account analysis and reduced the total cash deposits considered, allowing relief for certain cash withdrawals. - The Tribunal upheld part of the CIT(A)'s decision, considering the opening cash balance and reducing the addition based on explanations provided by the assessee. Issue 2: Application of Section 115BBE - The assessee argued that Section 115BBE, enacted on 15.12.2016, could not be applied for the year under consideration. - The Tribunal referred to precedents and held that since the search was conducted before the amendment, the addition should have been made under the prevailing provision, not Section 115BBE. - Following the precedent, the Tribunal concluded that Section 115BBE was not applicable in this case, allowing the ground raised by the assessee. Issue 3: Consideration of opening cash balance - The assessee claimed an opening cash balance of Rs. 12,80,000, supported by details of cash receipts, deposits, and expenses. - The Tribunal analyzed the expenses claimed by the assessee and adjusted the monthly expenses, concluding that only a portion of the opening balance was explained. - The Tribunal sustained an addition to the total income, partly allowing the ground raised by the assessee. Conclusion: - The Tribunal partially allowed the appeal, considering explanations provided by the assessee regarding cash deposits, application of Section 115BBE, and the opening cash balance, resulting in a reduction of the total addition to the income.
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