The Kolkata bench of Income Tax Appellate Tribunal (ITAT) has deleted the addition holding that the source of cash deposit during demonetization could not be brushed aside without evidence to the contrary.
The assessee Mahendra Kumar Parakh was an individual, who filed his return of income for the A.Y. 2017-18 on 31.03.2018 declaring total income. The case of the assessee was selected for scrutiny for the reasons that there was cash deposit during the period of demonetization.
The AO noticed that the assessee had made cash deposit during the demonetization period and the assessee was asked to give the details source of such cash deposit and in response to the same assessee had submitted that savings were out of accumulated of fund of cash, which were savings from over 30 years in the family. The submission of the assessee was not acceptable to the AO and after considering the submission of assessee, the cash deposit was treated as unexplained cash.
Pankaj Parakh, on behalf of the assessee submitted that the source of cash deposit was out of accumulated savings made by the assessee over the past period out of savings. He further submitted that CBDT vide Instruction No. 3/2017 dated 21.02.2017 had stated that no verification of cash deposit upto Rs. 2,50,000/- would be made as the source of such amount either household savings/savings from past income
Vijay Kumar, on behalf of the revenue, supported the order of the lower authorities.
Considering the submission and perusing the material available on record and in view of the CBDT Circular relying on the decision in the Uma Agrawal case, the two-member Bench of Manish Board (Accountant Member) and Sonjoy Sarma, (Judicial Member) allowed the appeal filed by the assessee holding that the explanation of the assessee about the source of cash deposit could not be brushed aside without any evidence to the contrary.
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