Cash from Sale of Crops Deposited during Demonetization Period, Supporting Documents Submitted: ITAT Removes Addition u/s 68 [Read Order]

The two-member bench of the Income Tax Appellate Tribunal (“ITAT”) had removed addition to cash deposit as unexplained as had been done under Section68. ITAT accepted the explanation given by the assessee in view of the cash deposits made during the demonetisation period. The assessee had deposited cash received from the sale of crops such as cotton from their land of more than 3 hectares.

The assessee’s case was selected for limited scrutiny to verify the cash deposit during the demonetization period. The Assessing Officer made an addition of INR 12,50,000/- which had been deposited in the Allahabad Bank which was added as unexplained under Section 68 of the Income Tax Act (“the Act”)

The assessee-appellant, Ramanbhai, detailed that he has more than 3 hectares which derive cash from the sale of crops such as cotton. He has submitted relevant bills, vouchers and other documents to prove these cash deposits.

The bench, consisting of Dr. B. R. R. Kumar (Vice-President) and Suchita Kamble (Judicial), has allowed the appeal holding that the cash deposits were properly explained by the assessee and removed the addition of unexplained cash deposits that were added as per Section 68.

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