“Not every deposit during Demonetisation Period would fall under category of Unaccounted Cash”: ITAT directs Re-adjudication with respect to genuineness of deposit [Read Order]

Not every deposit during Demonetisation Period - Demonetisation Period - Unaccounted Cash - ITAT - taxscan

The Bangalore bench Income Tax Appellate Tribunal (ITAT), while directing re-adjudication with respect to genuineness of deposit made during demonetisation period held that not every deposit during demonetisation period would not fall under category of unaccounted cash.

 The Assessee  Aijaz Ahmed Suri, Chalukya Nagar, is an individual, deriving income from salary.A after filing the return of income the assessee case was selected for scrutiny. During the course of assessment proceedings, the assessee was asked to show cause as to why cash deposited amounting to Rs. 12,26,000/- during the demonetization period ought not to be brought to tax.

In response to the show cause notice, the assessee filed a reply. The AO did not accept the explanation given by the assessee and held that the assessee’s explanation was unsatisfactory regarding the source of cash deposited and brought to tax Rs. 12,26,000/- under section 69A of the Act. The AO also applied the rate of tax as provided under section 115BBE of the Income Tax Act

Aggrieved by the order assesee filed an appeal before the CIT(A). The CIT(A) confirmed   the appeal filed by the assessee . Thereafter the assessee filed an appeal before the tribunal.

The tribunal observed that the as per the CBDT instructions dated 09/08/2019 speaks about the comparative analysis of cash deposits, cash sales, month wise cash sales and cash deposits. It also provides that whether in such cases the books of accounts have been rejected or not where substantial evidence of vide variation can be found between these statistical analyses.Also Instruction 21/02/2017 issued by the CBDT suggests some indicators towards verifying the suspicion of backdaCHANDRA POOJARIting of cash.

Therefore  the bench  opinion  that it is important to examine whether assessee falls into any of these categories and transfer of deposit of cash is not in line with history of transactions in the preceding assessment year.

Hence assessee is directed to establish all relevant details to substantiate its claim in line with the above applicable instructions based on the facts in present case

After analyzing the submission of both parties, the bench comprising Beena Pillai (Judicial Member) & Chandra Poojari, (Accountant Member) while directing re-adjudication observed that not every deposit during the demonetisation period would fall under category of unaccounted cash. However the burden is on the assessee to establish the genuineness of the deposit in order to fall outside the scope of unaccounted cash.

Subscribe Taxscan Premium to view the Judgment

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates