₹26.35 Lakh Addition on Cash Deposits during Demonetization: ITAT Orders Deletion [Read Order]

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) deleted the ₹26.35 lakh addition made on cash deposits during the demonetization period noting that the Revenue Department had accepted the sales and purchases without rejecting the books of accounts.

Shivinder Pal Singh Chahal,appellant-assessee, appealed against the order dated 26.10.2023, for the Assessment Year(AY) 2017-18 passed by Commissioner of Income Tax (Appeals)[CIT(A)].The issue involved the addition of Rs. 26,35,000/- due to cash deposits made during the demonetization period. The Assessing Officer (AO) found these sales unusually high compared to other periods and added the amount to taxable income. The CIT(A) upheld the addition, and the assessee appealed before the tribunal aggrieved by the order of CIT(A).

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The two member bench comprising Sudhir Pareek (Judicial Member) and Shamim Yahya (Accountant Member) reviewed the records and noted that the Revenue Department had accepted the sales and purchases without rejecting the books. Since the disallowance was not justified, it directed its deletion and allowed the appeal on this issue.

Read More:Addition of ₹1.22 Crore for Cash Deposits During Demonetization: ITAT Upholds CIT(A)’s Deletion

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The other issue involved the addition of Rs. 7,52,667/- due to a difference between purchases reported in the Income Tax Return (ITR) and the import-export data from Central Board of Excise and Customs(CBEC). The AO rejected the explanation and made the addition, which the CIT(A) upheld. The assessee appealed before the tribunal.

The tribunal reviewed the records and found that the difference of Rs. 7,52,667/- in purchases remained unreconciled due to a lack of a credible explanation. Since the addition was justified, it upheld the CIT(A)’s order and dismissed the appeal on this issue.

In short,the appeal filed by the assessee was partly allowed.

To Read the full text of the Order CLICK HERE

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