Tax on Cash Deposits during Demonetization already filed under Other Sources: ITAT directs AO to Delete Addition u/s 115BBE [Read Order]
Tax on Cash Deposits Already Filed Under Other Sources: ITAT directs Deletion of Additions
![Tax on Cash Deposits during Demonetization already filed under Other Sources: ITAT directs AO to Delete Addition u/s 115BBE [Read Order]](https://images.taxscan.in/h-upload/2025/08/12/2076044-cash-deposit-taxscan.webp "Tax on Cash Deposits during Demonetization already filed under Other Sources: ITAT directs AO to Delete Addition u/s 115BBE [Read Order]")
In a recent ruling, the Kolkata bench of the Income Tax Appellate Tribunal ( ITAT ) has directed the Assessing Officer (AO) to delete the addition made under Section 115BBE of the Income Tax Act on cash deposits that the assessee had already declared as income under “Other Sources” in the tax return. The case concerned an assessee, who had deposited ₹42 lakh in cash...
In a recent ruling, the Kolkata bench of the Income Tax Appellate Tribunal ( ITAT ) has directed the Assessing Officer (AO) to delete the addition made under Section 115BBE of the Income Tax Act on cash deposits that the assessee had already declared as income under “Other Sources” in the tax return.
The case concerned an assessee, who had deposited ₹42 lakh in cash in her Corporation Bank account during the demonetisation period. The assessee promptly disclosed the deposited amount as miscellaneous income under “Other Sources” in her income tax return for Assessment Year 2017-18 and paid tax as per the then-applicable slab rate.
However, in scrutiny proceedings, the AO treated the deposits as unexplained money under Section 69A and invoked Section 115BBE, which imposes a punitive tax rate on such unexplained amounts, resulting in double taxation of the same income.
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Arguing before the tribunal, the counsel for the assessee, S M Surana, argued that the deposited amount was transparently included in her tax return and appropriately taxed. The counsel further relied on rulings by coordinate benches in similar cases such as the Shri Dinesh Kumar Singal v. ITO and ITO v. Aakriti Jain in which it was held that taxing the same income twice, first as declared income and again as unexplained money, was impermissible under the law.
The Income Tax Appellate Tribunal concurred with the assessee’s position, noting that the AO had accepted the returned income, which already included the ₹42 lakh in question.
The bench observed, “We note that the ld. Assessing Officer has not disputed the return filed by the assessee, wherein the assessee has suo moto shown the cash deposit of ₹42 lakh as income. However, another addition over and above the income declared by the assessee towards cash deposited resulted in double addition of the same amount of income and also levied taxes at the rate as provided u/s 115BBE of the Act.”
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It was further noted by the bench of Pradip Kumar Choubey (Judicial Member) and Rajesh Kumar (Accountant Member) that, “In our opinion, the order passed by the ld. Assessing Officer and confirmed by the CIT(A) is totally wrong as the same income cannot be taxed twice.”
Thus, the tribunal set aside the order of the CIT(A) and decisively directed the AO to delete the addition.
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