ITAT deletes ₹1.53 Crore Addition on Petrol Pump’s Demonetization Cash Deposits, citing Legal Acceptance of Old Notes [Read Order]
The ruling was based on the fact that petrol pumps were legally allowed to accept old currency notes during the relevant period, in line with government notification S.O. 3544(E) dated 24 November 2016..
![ITAT deletes ₹1.53 Crore Addition on Petrol Pump’s Demonetization Cash Deposits, citing Legal Acceptance of Old Notes [Read Order]](https://images.taxscan.in/h-upload/2025/11/11/2104103-itat-petrol-pumps-demonetization-cash-deposits-legal-acceptance-old-notes-taxscan.webp "ITAT deletes ₹1.53 Crore Addition on Petrol Pump’s Demonetization Cash Deposits, citing Legal Acceptance of Old Notes [Read Order]")
The Ahmedabad bench of Income Tax Appellate Tribunal (ITAT) has deleted an addition of ₹1.53 crore made under Section 69A in the case of a petrol pump owner for the Assessment Year 2017-18. The tribunal held that the cash deposits during the demonetization period were legitimate business receipts. The present appeal was filed by Vasudev Chotabhai Patel, a petrol pump owner, against...
The Ahmedabad bench of Income Tax Appellate Tribunal (ITAT) has deleted an addition of ₹1.53 crore made under Section 69A in the case of a petrol pump owner for the Assessment Year 2017-18. The tribunal held that the cash deposits during the demonetization period were legitimate business receipts.
The present appeal was filed by Vasudev Chotabhai Patel, a petrol pump owner, against the order of the Commissioner of Income Tax (Appeals), NFAC, Delhi, dated 7 March 2024, for the Assessment Year 2017-18.
The AO had treated cash deposits amounting to ₹1.53 crore made during the demonetization period as unexplained income under Section 69A, alleging that the sales were bogus.
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The assessee’s counsel argued that the deposits were genuine business receipts from fuel sales and that all relevant documents, including purchase registers, sales registers, stock statements, and VAT returns, had been filed to substantiate the claims.
It was further highlighted that government notification S.O. 3544(E) dated 24 November 2016 allowed petrol pumps to accept demonetised currency up to 15 December 2016, making the cash deposits lawful.
The Department contended that the cash sales during the demonetization period had increased compared to earlier periods, suggesting that unaccounted money was introduced under the guise of legitimate sales.
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However, the ITAT found that the increase in cash sales was consistent with normal business operations and could be explained by the legal allowance for petrol pumps to accept demonetised notes. The tribunal emphasised that the cash deposits matched the total sales reported and were supported by documentary evidence, negating the claim of unexplained income.
After examining the submissions and records, the two-member bench of Annapurna Gupta (Accountant Member) and Sanjay Garg (Judicial Member) concluded that there was no justification for the addition made by the lower authorities.
The tribunal deleted the ₹1.53 crore addition under Section 69A, holding that the deposits were genuine business receipts and legally permissible under the demonetization regulations.
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