Unexplained Cash Deposit of Rs. 1.2cr made During Demonetisation: ITAT Reduces Addition Drastically, Retains Lump Sum ₹8 Lakh [Read Order]

The Income Tax Appellate Tribunal (ITAT), New Delhi Bench, heard a matter wherein the subject was the unexplained cash deposit of INR 1.2 crore during the demonetisation period. The ITAT reduced the addition drastically but retained a lump sum amount of INR 8 lakhs.

The facts of the case are that the assessee company’s return of income was selected for complete scrutiny under CASS. The assessee deposited cash during the demonetization period amounting to INR 1,23,97,000/-. The assessee was asked to present documentary evidence and the source of the cash deposited from 09.11.2016 to 31.12.2019.

The counsel for the assessee called for attention to the assessee’s financials consisting of his books of account, reconciliation of sales and purchases, cash deposits, etc. However, the fact remains that the assessee could not prove the source of improvement of cash deposited, despite the assessee company being engaged in the sale of footwear items.

On appeal, the First Appellate Authority deleted the additions made by the Assessing Officer (AO) as it considered the submission that the cash was sourced from the sales made to customers.

The tribunal made the addition of only INR 8 lakhs with necessary computation pending. The assessment under Section 115BBE of the Income Tax Act, 1961 was not called into effect as the transaction had been done before 01.04.2017.

The bench of Satbeer Singh Godara (Judicial Member) and Amitabh Shukla (Accountant Member) thus partly allowed the appeal of the Revenue.

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