The Kolkata Bench of Income Tax Appellate Tribunal ( ITAT ) set aside the Additional/ Joint Commissioner of Income Tax ( Appeals ) [ Addl./Jt.CIT ( A ) ] order and remanded the case for fresh hearing, involving an unexplained cash deposit of ₹6.5 lakh during the demonetization period.
Rajesh Kumar Dalmia, appellant- assessee, filed his income tax return for the Assessment Year 2017-18 on 30/07/2017, declaring ₹6,08,660/-. His case was selected for scrutiny due to an unusual increase in cash deposits during the demonetization period (09/11/2016 to 30/12/2016). A notice under section 143 ( 2 ) was issued on 24/09/2019.
It was found that the assessee had deposited ₹6,50,000/- in his bank account (No. 01119878801) with Kotak Mahindra Bank during the demonetization period. Multiple notices were issued requesting details. After reviewing his responses, the ₹6,50,000/- was treated as unexplained cash credits under section 68 and taxed accordingly.
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The assessee, dissatisfied with the assessment order, appealed to the Addl./JCIT(A), who dismissed the appeal, and then challenged the decision before the tribunal.
The assessee’s counsel, during the appeal, mentioned that the assessee had only submitted a list of 31 people with their Permanent Account Number (PAN)s and mobile numbers, without explaining the source of the cash deposits under Rule 46A.
The assessee did not provide supporting documents during the appeal. As a result, the Addl./Jt. CIT(A) upheld the AO’s decision to treat the deposits as unexplained cash credits under section 68, referencing Supreme Court rulings in Kale Khan Mohd. Hanif vs CIT and Roshan di Hatti vs. CIT.
The assessee’s counsel requested the case be sent back to the Addl./Jt. CIT(A) to present more evidence. The assessee also explained that the deposits were advances for stamp papers, not unsecured loans, but this was not addressed in the appeal. The revenue counsel supported the Addl./Jt. CIT(A)’s order and asked for it to be upheld.
The two member bench comprising Sonjoy Sarma (Judicial Member) and Rakesh Mishra(Accountant Member) reviewed the submissions made before the Addl./Jt. CIT(A) and found that the appeal was dismissed based on Supreme Court rulings in Kale Khan Mohd. Hanif and Roshan di Hatti.
The Addl./Jt. CIT(A) did not consider the list of 31 people with their PANs and mobile numbers, which could explain the source of cash deposits during demonetization. The assessee had not filed an application under Rule 46A.
The assessee argued they had documents to present, so the tribunal decided to give them one last chance. It set aside the Addl./Jt. CIT(A)’s order and allowed the assessee to submit documents and avoid unnecessary delays.
In short,the appeal filed by the assessee was allowed for statistical purposes.
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