Rama Rao Nallamothu Vs ITO (ITAT Visakhapatnam)
Summary: The assessee’s reassessment for AY 2017-18 resulted in additions of ₹6.04 lakh under Section 69A, ₹17.35 lakh under Section 68 and ₹23,176 as undisclosed interest income. Before the Tribunal, the assessee did not press the challenge to the additions and restricted the dispute to the application of the enhanced tax rate of 60% under Section 115BBE. Following the Rajasthan High Court’s decision in Deepak Maratha v. Pr. CIT, the Visakhapatnam ITAT held that the enhanced rate introduced by the Finance Act, 2016 came into force only from 1 April 2017 and, therefore, applies from FY 2017-18 corresponding to AY 2018-19 onwards. Since the disputed income related to FY 2016-17, the law prevailing on 1 April 2016 applied. Accordingly, the Tribunal directed the Assessing Officer to tax the unexplained income at 30% instead of 60% and partly allowed the assessee’s appeal.
Visakhapatnam ITAT: Enhanced 60% Tax Rate Under Section 115BBE Not Applicable to AY 2017-18
The assessee’s reassessment for AY 2017-18 resulted in additions of ₹6.04 lakh under Section 69A, ₹17.35 lakh under Section 68 and ₹23,176 as undisclosed interest income. Before the Tribunal, the assessee did not press the challenge to the additions and restricted the dispute to the application of the enhanced tax rate of 60% under Section 115BBE.
Following the Rajasthan High Court’s decision in Deepak Maratha v. Pr. CIT, the Visakhapatnam ITAT held that the enhanced rate introduced by the Finance Act, 2016 came into force only from 1 April 2017 and, therefore, applies from FY 2017-18 corresponding to AY 2018-19 onwards. Since the disputed income related to FY 2016-17, the law prevailing on 1 April 2016 applied. Accordingly, the Tribunal directed the Assessing Officer to tax the unexplained income at 30% instead of 60% and partly allowed the assessee’s appeal.
List of Cases Discussed / Relied Upon
- Deepak Maratha v. Pr. CIT- II, Jodhpur, Civil writ Petition No. 3625/2020 dated 27.05.2026 — relied upon by the Tribunal on the applicability of the enhanced 60% rate under Section 115BBE to AY 2017-18.
FULL TEXT OF THE ORDER OF ITAT VISAKHAPATNAM
This appeal is filed by the Assessee against the order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter in short “Ld.CIT(A)”] vide DIN: ITBA/NFAC/S/250/2025 -26/1085848034(1) dated 10-Feb-2026 for the Assessment Year 2017-18.
