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Facts
The assessee had made a cash deposit of Rs. 3.50 lakh during the demonetization period. The assessee claimed this amount originated from cash sales made after November 8, 2016. The Assessing Officer added the entire amount to the assessee's income.
Held
The Tribunal held that the assessee could explain the source of cash deposit from cash sales only to the extent of Rs. 2,02,900/-. The remaining amount of Rs. 1,47,100/- was confirmed to be added to the assessee's income.
Key Issues
Whether the cash deposit made during the demonetization period from cash sales is adequately explained by the assessee?
Sections Cited
250, 144(3)
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Income Tax Appellate Tribunal, PUNE BENCHES “SMC”, PUNE
Before: DR.MANISH BORAD
आदेश / ORDER
The captioned appeal at the instance of assessee pertaining to A.Y. 2017-18 is directed against the order dated 18.03.2025 of Addl/JCIT(A)-2 Chennai passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Assessment Order dated 19.12.2019 passed u/s.144(3) of the Act.
The sole grievance of the assessee is against the addition of Rs.3.50 lakh made by the Assessing Officer for excess of the investment during demonetization period.
I have heard the rival contentions and perused the record placed before me. Ld. Counsel for the assessee has submitted that the source of cash deposit of Rs.3.50 lakh is from the cash sales made after 08.11.2016 and the amount was received in the specified bank notes (SBN). On the other hand, ld. Departmental Representative submitted that even though not
Admittedly, assessee maintains regular books and consistently makes Cash Sales. Even ld. Assessing Officer has not doubted the cash sales made during the year except for demonetization period. It thus proves that cash sales have been effected against SBNs. But, even if for the sake of argument, it is considered that cash of Rs.3.5 lakh is from the cash sales then also if we take the basis of Cash Book filed by assessee then during the period of demonetization period from 08.11.2016 to the date of alleged cash deposit, cash sales are only to the extent of Rs.2,02,900/-. This fact indicated by the ld. Departmental Representative could not be rebutted by the ld. Counsel for the assessee.
Under these given facts and circumstances, I find that the assessee has been able to explain the source of alleged cash deposit from cash sales only to the extent of Rs.2,02,900/- and the remaining amount of Rs.1,47,100/- deserves to be added in the hands of assessee. Addition confirmed by ld. CIT(A) is sustained to the extent to Rs.1,47,100/-. The assessee gets part relief. Grounds of appeal raised by the assessee are partly allowed.
In the result, appeal of the assessee is partly allowed.
Order pronounced on this 28th day of July, 2025.