The Chennai Bench of Income Tax Appellate Tribunal (ITAT) has upheld the revision order observing that the Assessing Officer (AO) had failed to conduct investigation regarding cash deposits during the demonetisation period.
The AO while framing assessment made assessment under Section 143(3) of the Act scrutiny assessment through CASS. The AO examined the cash deposit made during demonetization period and framed assessment.
Subsequently, the Principal Commissioner of Income Tax (PCIT) on verification of records noted that the assessee, K. Rajeswari was engaged in the business of purchase of edible oil and food products and selling them to retail outlets in and around Tuticorin.
The PCIT noted that the assessee had made cash deposits in the bank account during demonetization period. He noted that on enquiry from the assessee, the assessee explained that the cash received form petty shop holders for the product sold was deposited in the bank account.
But, the PCIT held that the AO has not at all examined this issue as was noted from the assessment order and hence, he held that for lack of examination or verification of the issue, the assessment order was erroneous and prejudicial to the interest of Revenue
K. Balasubramanian, appeared on behalf of the assessee and R. Mohan Reddy appeared on behalf of the revenue.
The Division Bench of Mahavir Singh, (Vice President) and Manoj Kumar Aggarwal, (Accountant Member) noted that the cash deposited by assessee in specified bank notes were received during demonetization period and nothing was examined by the AO while framing assessment. The appeal filed by the assessee was dismissed accordingly.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
