Unexplained Deposits are Cash Sales during Demonetization, Only 8% is Income: ITAT Allows Income Tax Appeal Partly [Read Order]

The Income Tax Appellate Tribunal (ITAT), Pune Bench, has partly allowed an appeal, holding only 8% of unexplained cash deposits as income. Since the deposits made during demonetization were attributed by sales.

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The sole grievance by the assessee-appellant, Aurangabad Steel, was the addition of INR 38,57,530 in unexplained cash deposits. The matter was heard ex parte qua assessee as even after being imitated twice before, the assessee-appellant failed to make an appearance.

The tribunal observed that the partnership firm, Aurangabad Steel, declared income for Annual Year (AY) 2017-18 where quarterly sales figures have been declared. Further, it had been observed that the Assessing Officer (AO) had not rejected the book of account results and only questioned the amount from cash sales which took place during demonetization.

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Finally, the Pune Bench through Dr. Manish Borad (Accountant Member), held that the source of the cash deposits are cash sales of the business carried out by the assessee. But since the necessary details could not be furnished from the available records, 8% of these unexplained cash deposits would be estimated in assessee-appellant’s income. Further, addition was sustained at INR 3,08,600 and the appeal was partly allowed.

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