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Judgment
This appeal by the assessee is directed against the order of the Commissioner of Income Tax (Appeal) Addl/JCIT(A), Jodhpur (hereinafter referred to as 'the CIT(A)') dated 24th March, 2026, for assessment year 2017-18.
Shri Ashish Jain, appearing on behalf of the assessee submits that the assessee in appeal has assailed the addition of ₹10,98,000/- under Section 69A of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') made by the Assessing Officer on account of cash deposits in the Bank account during demonetization. During the course of assessment, the assessee had furnished break-up of the cash deposits during demonetization. The learned Counsel referred to the table given in paragraph No.4 of the assessment order to explain the source of cash deposits in the bank during demonetization. He submits that facts in the case of assessee are identical to the facts in the case of Pranay Jain in ITA No.3589/Del/2025 decided on 24th October, 2025 by the Tribunal. The learned Counsel thus prayed for allowing the appeal of the assessee in similar terms.
Per contra, Shri Manoj Kumar, learned Senior DR representing the Department reiterated findings of the Assessing Officer and the CIT(A) and prayed for dismissing appeal of the assessee.
Submissions made by rival sides heard, orders of lower authorities examined. The solitary issue for adjudication in the present appeal is the addition of ₹10,98,000/- made under Section 69A of the Act on account of cash deposits in the bank account of the assessee during demonetization. The assessee has furnished the source of cash deposits as under:-
| S.No. | Date of deposit in bank account | Amount (Rs.) | Source |
|---|---|---|---|
| 1. | 10.11.2016 | 4,00,000 | Out of cash in hand as at 31.03.2016 |
| 2. | 12.11.2016 | 1,60,000 | Out of salary from Jai Prakash Jain & Sons |
| 3. | 12.11.2016 | 90,000 | Tuition Income |
| 4. | 15.11.2016 | 48,000 | Out of cash in hand |
| 5. | 17.11.2016 | 1,00,000 | Out of tuition income |
| 6. | 17.11.2016 | 1,00,000 | Out of Gift received from Grand Father Shri Jai Prakash Jain |
| 7. | 01.12.2016 | 2,00,000 | Out of Gift received from Grand Father Shri Jai Prakash Jain |
| Total | 10,98,000/- |
A perusal of the details furnished by the assessee with regard to the amounts reflected against cash in hand, no documentary evidence was furnished to substantiate that the amount of ₹4,00,000/- deposited on 10th November, 2016 and ₹48,000/- deposited on 15th November, 2016 was available with the assessee as cash in hand. Likewise, no details were filed to corroborate that cash deposit of ₹90,000/- on 12th November, 2016 and ₹1,00,000/- on 17th November, 2016 were out of tuition income.
The assessee has further explained that the cash deposit of ₹1,60,000/- on 12th November, 2016 is from salary received from M/s Jai Prakash Jain & Sons. The contention of the assessee is that the assessee is receiving monthly salary of ₹20,000/- in cash. To substantiate the same, ledger accounts of the said firm were produced. We find that additions for similar reasons were made in the case of Pranay Jain for assessment year 2017-18. The matter travelled to the Tribunal in ITA No.3589/Del/2025 (supra). The Tribunal, after examining the facts and submissions of the assessee, accepted the source of cash deposits to the tune of ₹1,40,000/- from salary income. For parity of reasons, cash deposit of ₹1,40,000/- deposited on 12th November, 2016 from salary for the months of April to October, 2016 (seven months) is accepted. Further, the assessee has submitted that ₹3,00,000/- (₹1,00,000/- on 17th November, 2016 and ₹2,00,000/- on 1st December, 2016) were deposited out of cash gift received from grandfather Shri Jai Prakash Jain. Confirmation of cash gifts from Shri Jai Prakash Jain were furnished before the lower authorities. In light of confirmation of gifts from the grandfather, the source of cash deposits of ₹3,00,000/- is accepted. Thus, the assessee gets relief in respect of cash deposits to the extent of:-
| Salary income | : | ₹1,40,000/- |
| Cash gifts from grandfather | : | ₹3,00,000/- |
| Total | : | ₹4,40,000/- |
The addition of remaining amount ₹6,58,000/- is confirmed. Ground No.1 of the appeal is partly allowed, accordingly.
In ground No.2 of appeal, the assessee has assailed invoking provisions of Section 115BBE of the Act. The Hon'ble Madras High Court in the case of SMILE Microfinance Ltd. Vs. ACIT, WP(MD) No.2078 of 2022 decided on 19th November, 2024 has held that amendment to Section 115BBE of the Act would come into effect from 1st April, 2017 i.e., relevant to assessment year 2018-19 onwards. Thus, in the impugned assessment year, un-amended provisions of Section 115BBE of the Act would apply.
In the result, the appeal of the assessee is partly allowed.