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TMI Blog2025 (4) TMI 1030X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 143(2) and 142(1) of the Act were issued and served on the assessee calling for details. In response, assessee submitted her reply on 16.12.2019 explaining the sources of cash deposits, but has failed to explain the continuous cash deposits and withdrawals in her bank account. Thereafter a show-cause notice dated 18.12.2019 was issued to the assessee to explain the sources of cash available with her and proposing additions in case of non-compliance. She filed an explanation dated 24.12.2019 wherein the Ld.AO has not accepted the submissions and treated an amount of Rs. 53,75,000/- as unexplained income under section 69A r.w.s. 115BBE of the Act. 3. On being aggrieved by the order of the Ld. Assessing Officer [hereinafter in short "Ld. AO"], assessee filed an appeal before Ld. CIT(A). Before Ld.CIT(A), assessee reiterated the submissions made before Ld. AO. Assessee also raised a legal ground before Ld. CIT(A) regarding the applicability of section 115BBE of the Act for the A.Y. 2017-18 with respect to the transactions entered into on or before 01.04.2017. Ld. CIT(A) after examining the submissions, dismissed the appeal of the assessee. 4. On being aggrieved by the order of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made any cash deposits during the demonetization period. He therefore submitted that since the assessee is in the habit of frequently withdrawal of cash and depositing into the account depending upon the purposes for which it was withdrawn. The sources of cash deposits remain explained and hence addition under section 69A of the Act shall not be warranted. 7. Per contra, Ld. Departmental Representative [hereinafter in short "Ld.DR"] relied on the orders of the Revenue Authorities. 8. We have heard both the sides and perused the material available on record. It is an admitted fact that the assessee has made cash deposits and cash withdrawals on various dates during the impugned assessment year and has shown the opening balance of cash of Rs. 32,25,000/- as on 07.11.2016. The contention of the Ld. AO is opening balance of cash of Rs. 32,25,000/- was not deposited during the demonetization period wherein the assessee has retracted her own statement regarding the availability of cash as on 07.11.2016. Ld. AO therefore did not consider the reply of the assessee regarding the availability of cash as on 07.11.2016. Further Ld. AO has also observed that when the assessee held huge cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llows: - "12. We find that the issue stands settled by the order of the Hon'ble High Court of Madras in the case of SMILE Microfinance Limited Vs. the Assistant Commissioner of Income Tax. The relevant extract of the order is reproduced as under: - "16. The next contention raised by the Learned Senior Counsel is that the under section 115BBE the rate of tax imposed is increased from 30% to 60% and the same is applicable with effect from 01.04.2017 onwards as per the amendment. Therefore, the same is applicable to any transaction from 01.04.2017 onwards and nor prior to any transactions prior to 01.04.2017. Since in the present case all alleged transactions are for the period from 08.11.2016 to 30.12.2016, hence the erstwhile rate of tax 30% only is applicable. But the contention of the revenue is that the amendment was with effect from 01.04.2017 and hence the same is applicable for the financial year 2016-2017 and the assessment year 2017-2018. Further the amendment to section 115BBE is directly 15 of 26 https://www.mhc.tn.gov.in/judis related to demonetization which would be evident from objects and reasons for such amendment. In order to consider the same, the objects and re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the "Pradhan Mantri Garib Kalyan Deposit Scheme, 2016". This amount is proposed to be utilised for the schemes of irrigation, housing, toilets, infrastructure, primary education, primary health, livelihood, etc., so that there is justice and equality. An overview of the amendments proposed in the Bill are placed below; Overview of Amendments Proposed PARTICULARS EXISTING PROVISIONS PROPOSED PROVISIONS General Provision For penalty PENALTY (Section270A) Under-reporting - @f0°S of tax Misreporting- @50% of tax (Under- reporting/ Misreporting income is normally difference between returned income and assessed income) No changes proposed Provisions for & of taxation penalty unexplained cre.dit, investment, cash and other assets TAX (section 115BBE) Flat rate of tax @30% surcharge + cess (No expense, deductions, set-off is allowed) TAX (Section115BBE) + Flat rate of tax @60% surcharge @25%]"tax (i.e 15% of such income). So total incidence of tax is 75% approx. (No expense, deductions, setoff is allowed). PENALTY (Section271AAC) If Assessing Officer determines income referred to in section 1I5BBE, penalty @l0% of tax payable in addition to tax ("including surcha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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