Demonetization Cash Deposits: ITAT directs Fresh Assessment, Gives Assessee Opportunity to Submit Relevant Documents [Read Order]
However, considering the undue delay and non-compliance at earlier stages, the ITAT imposed a cost of Rs. 20,000, payable to the Tamil Nadu State Legal Services Authority at the Hon’ble High Court of Madras within one month
![Demonetization Cash Deposits: ITAT directs Fresh Assessment, Gives Assessee Opportunity to Submit Relevant Documents [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/02/ITAT-ITAT-Chennai-Assessment-Demonetization-Cash-Deposits-Demonetization-taxscan.jpg "Demonetization Cash Deposits: ITAT directs Fresh Assessment, Gives Assessee Opportunity to Submit Relevant Documents [Read Order]")
In a significant ruling, the Income Tax Appellate Tribunal ( ITAT ) Chennai Bench has remanded the case of Ramesh Sreenivasalu for fresh assessment, directing the Assessing Officer (AO) to reconsider the matter after allowing the assessee to submit relevant documents. The case pertains to cash deposits made during the demonetization period, which were earlier held as unaccounted income...
In a significant ruling, the Income Tax Appellate Tribunal ( ITAT ) Chennai Bench has remanded the case of Ramesh Sreenivasalu for fresh assessment, directing the Assessing Officer (AO) to reconsider the matter after allowing the assessee to submit relevant documents. The case pertains to cash deposits made during the demonetization period, which were earlier held as unaccounted income under Section 69 of the Income Tax Act, 1961.
The case was heard by a bench comprising Aby T. Varkey (Judicial Member) and Jagadish (Accountant Member). The appeal was filed against the order of the Commissioner of Income Tax (Appeals) CIT(A), which upheld the AO’s decision to add Rs. 22,94,500(Around 23 Lakh) as unexplained cash deposits and estimate additional income at 8% of cash deposits made outside the demonetization period.
The assessee, engaged in supplying PepsiCo products and homemade snacks in Salem, had filed a return declaring total income of Rs. 10,37,550(Around 10 Lakh). However, the AO treated the cash deposits as undisclosed income due to the lack of supporting evidence. The CIT(A) upheld this view, citing the assessee’s failure to furnish any documentary proof.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
During the ITAT proceedings, the assessee submitted an agreement with PepsiCo India Holdings Pvt. Ltd. and financial statements supporting the claim that the cash deposits stemmed from business sales. The assessee also admitted that these documents were not presented before the lower authorities and requested another opportunity to prove his case.
Tax Effect of ₹54.04 Lakh Below CBDT’s 60 Lakh Limit: ITAT Dismisses Revenue’s Appeal
The ITAT, after hearing both sides, noted the importance of procedural fairness and decided to provide the assessee a final opportunity to substantiate his claims. The tribunal remanded the matter back to the AO for a fresh assessment, instructing the assessee to submit the required documents.
Comprehensive Guide of Law and Procedure for Filing of Income Tax Appeals, Click Here
However, considering the undue delay and non-compliance at earlier stages, the ITAT imposed a cost of Rs. 20,000, payable to the Tamil Nadu State Legal Services Authority at the Hon’ble High Court of Madras within one month.
To Read the full text of the Order CLICK HERE
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