VIMALABAI,CHENNAI vs. ITO, NCW-19(6), CHENNAI

The only effective ground of appeal in this appeal of assessee is against confirming the addition of cash deposits of Rs.10,20,000/- in the bank account during demonetization period.

1. 3. The assessee is an individual and filed her return of income showing total income of Rs.2,70,720/-. The case was selected for scrutiny to verify the cash deposit during demonetization period. The assessee has deposited cash of Rs.10,20,000/- in the Central Bank of India, Alandur Branch. The assessee before the A.O has explained that the assessee derives income from money lending business and cash deposit is out of her money lending business and submitted bank statement, profit and loss account and balance sheet in support of her contention. However, the A.O rejected the assessee’s explanation on the ground that the assessee has filed return of income in ITR-I, which is for salary of the assessee. On appeal, the Ld. JCIT(A) has confirmed the addition disregarding the assessee’s explanation.

The Ld. Authorized Representative (A.R) of the assessee has argued that the Ld. JCIT(A) and A.O have ignored the fact that the assessee has been showing income from money lending business in the income tax return being filled since 2005-06 and and the cash deposit is duly recorded in the books of account. The Ld. AR in support of her contention has submitted a copy of profit and loss account and cash book. The Ld. AR has explained that the opening cash balance recorded in the cash book as on 01.04.2016 is Rs.12,57,297/- and the cash balance as on 01.11.2016 is Rs.13,73,547/-. The cash deposit has been made out of the above money which is apparent from the books of account. The Ld. AR therefore, has requested that the addition may be deleted.