Addition of Cash Deposits During Demonetization: ITAT Quashes Addition Based on Tuition Income and Marriage Gifts [Read Order]

The Ahmedabad Bench of Income Tax Appellate Tribunal(ITAT) quashed the addition of ₹10,09,750 made under Section 69A of Income Tax Act,1961, for cash deposits during the demonetization period, ruling that the deposits were supported by the assessee's regular tuition income and marriage gifts.

Hitesh Jaysingbhai Purohit,appellant-assessee,filed his income tax return on August 3, 2017, declaring ₹3,04,500 for AY 2017-18. During assessment, the Assessing Officer(AO) found that he had deposited ₹10,09,750 in cash into his IndusInd Bank account during the demonetization period. Since no explanation was provided, the AO added the entire amount to his income through an order dated November 25, 2019.

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Aggrieved by the AO's order, the assessee appealed before the Commissioner of Income Tax(Appeals)[CIT(A)], claiming that the cash deposits came from regular tuition income and ₹3.5 lakh received as a gift during a marriage. The assessee submitted detailed accounts and an affidavit to support the claim.

Read More: Cash Gifts during Marriage is Customary in India: ITAT deletes Addition Including Demonetized Notes received as Marriage Gift

The two member bench comprising Dr.BRR Kumar (Vice President) and Siddhartha Nautiyal (Judicial Member)  noted that the assessee repeated the arguments made before the revenue authorities, while the departmental representative relied on the lower authorities' orders. Since the assessee had an undisputed opening cash balance of ₹5,16,400, along with tuition income and marriage gifts, the  ITAT ruled that no addition under Section 69A was justified.

Read More: Marriage Gifts / Cash received through Banking Channel cannot be treated as source for Cash Deposits: ITAT deletes Addition

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In short, the appeal filed by the assessee was allowed.

To Read the full text of the Order CLICK HERE

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