The Chennai bench of the Income Tax Appellate Tribunal (ITAT) upheld the addition for unexplained cash credit due to failure to prove the genuineness of transaction using demonetized currencies
The assessee challenged the order of the Commissioner of Income Tax (Appeals) – National Faceless Appeal Centre (NFAC), New Delhi dated 17.11.2021 relevant to the assessment year 2017-18.
The assessee, Shri Palanisamy Chinnasamy proprietor of Chozha Furniture Mart, Dharapuram. The Assessing Officer noticed that during the period of demonetization from 09.11.2016 to 30.12.2016, the assessee made various deposits in various bank accounts. The assessee has not filed his return of income for the assessment year 2017-18 and has filed a return of income on 29.03.2019 declaring a gross total income of ₹.4,49,148/-, which was a belated one which was held as invalid by the Assessing Office.
The Assessing Officer has observed that the deposit of ₹.5,74,900/- received from the customers on various dates in old notes cannot be accepted as genuine as the assessee was not supposed to receive old currency as per the norms. CIT(A) confirmed the order passed by the Assessing Officer.
The assessee contended that he has received and remitted the demonetized currency within the time stipulated by Act No. 2 of 2017 of the Specified Bank Notes (Cessation of Liabilities) Act, 2017. The Assessing Officer viewed that the assessee has been doing furniture business which does not fall under the exemption category.
The Tribunal observed that the assessee failed to furnish complete details in response to various notices issued by the Assessing Officer and there was no response to the notices issued by the CIT(A).
Shri V. Durga Rao, Judicial Member & Shri G. Manjunatha, Accountant Member held that the assessee shall furnish complete details before the Assessing Officer and directed the Assessing Officer to decide the issue afresh after verification of details as may be filed by the assessee. The appeal filed by the assessee was allowed for statistical purposes.
Shri N. Subaramanian appeared on behalf of the appellant and Shri Raveendra Benakattin appeared on behalf of the respondent.
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