Amendment to section 115BBE cannot be applied to search conducted prior to effective date

Samir Shantilal Mehta Vs ACIT (ITAT Surat)

ITAT Surat held that provision of section 115BBE of the Income Tax Act as amended vide Taxation Laws (Second Amendment) Bill 2016 which is effective from 01.04.2017 cannot be applied to search conducted prior to the effective date.

Facts- The solitary grievance of the assessee, Samir Shantilal Mehta, in this appeal was that whether provisions of section 115BBE of the Income Tax Act would be applicable to tax the unexplained money being undisclosed gold, Jewellery found during the course of search, when the date of search is 16.08.2016.

Conclusion- We note that case of the assessee, under consideration is that the amendment in section 115BBE came into force only on 15.12.2016 whereas the search was conducted on 16.08.2016 and the assessee has paid tax @ 30%. Since the search in the case of the assessee was carried out before the amendment the addition ought to have been made in terms of the prevailing provision and therefore, the addition made by the assessing officer invoking section 115BBE, provision of which came into force only on 01.04.2017, is not sustainable. Therefore, we note that assessee’s issue is squarely covered by the aforesaid precedents, hence we allow the appeal of the assessee.

FULL TEXT OF THE ORDER OF ITAT SURAT

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