RUHEENA BEGUM SHAIKH AMIR,,JALNA vs. ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE,, JALNA

The solitary ground of the assessee is the confirmation of addition by NFAC, Delhi of Rs. 7,64,304/- on account of specified bank notes (SBN) deposited during the period from 03-12-2016 onwards as income u/s 68 read with section 115BBE of the Income-tax Act, 1961 (hereinafter referred to as “the Act). 3. At the very outset, the ld. A.R submitted that there is a delay of 90 days. The period is covered in assessee’s case by the decision of Hon'ble Supreme Court in the case of Cognizance for Extension of Limitation, In re 438 ITR 296 (SC) read with judgment in cognizance for Extension of Limitation, In re 432 ITR 206 (SC) dated 08-03-2021 suo moto. The assessee has, to this effect filed a condonation petition and an affidavit for condoning the delay.

Having gone through the condonation petition and the affidavit, it is noticed that delay caused was absolutely circumstantial and there is no malafide intention of the assessee for the said delay. The ld. D.R did not raise any objection for condonation of delay. In view thereof, the delay is condoned and the case is heard on merits. 5. The assessee is an individual engaged in the business of retail trade in automotive fuel and petrol pump. The assessee filed her return of income for A.Y. 2017-18 on 27-10-2017 declaring total income of Rs. 9,73,290/-. The case was selected for scrutiny under CASS. It was noticed that the assessee deposited cash into bank account during the demonetisation period. The assessee had deposited an amount of Rs. 10,32,000/- in HDFC Bank, Jalna Branch after 03-12-2016. It is the case of the department that as per the Government Notification dated 30-11-2016 it was clearly mentioned that petrol/diesel/gas under authorisation of Public Sector Oil Marketing Company were not allowed to accept specified bank notes (SBN) for selling petrol/diesel/gas after 03-12-2016. However, the assessee has deposited an amount of Rs. 10,32,000/- after 03-12-2016. It was further verified by the A.O as per the cash book submitted during the assessment proceedings that the closing balance was at Rs. 2,67,696/. The A.O therefore, allowed Rs. 2,67,000/- out of total amount deposited by the assessee of Rs. 10,32,000/- and disallowed Rs. 7,64,304/- as excess cash accepted and deposited after 03-12-2016, as unexplained cash credit u/s 68 of the Act, which was taxed u/s 115BBE of the Act. The NFAC also upheld the order of the A.O on the same ground that the assessee while dealing in business of retail trade in petrol/diesel/gas has accepted and deposited cash of SBN notes after 03-12-2016 in contravention with the directives of the Government Notification dated 30-11-2016.

I have perused the case records, analysed facts and circumstances in this case. It is undisputed fact that the assessee is having a retail business of selling petrol/diesel/gas through petrol pump and this source of income has not been disputed at all neither by the A.O nor by the NFAC. The A.O has simply made the addition only on the technical ground that vide Government of India Notification dated 30-11-2016 so far as petrol pump dealers are concerned, they cannot deposit in SBN notes after 03-12-2016. The NFAC has also confirmed the addition on the same ground. However, none of the authorities have disputed the source of income of the assessee. The basic purpose of demonetization scheme was to curb and catch the black money in our country. The scheme was for those who were having unaccounted income and ultimately those people who were defrauding the Government by not paying legal taxes. In this case, the source of income of the assessee is not disputed by the department. As a petroleum dealer, the assessee has accepted and deposited SBN Notes after 03-12-2016 but this is not a case where the addition can be made u/s 68 of the Act as unexplained cash credit. In the case of assessee, nothing is unexplained rather the source of income of the assessee has already been accepted by the department. The Income-tax Act is a welfare legislation where interest of the tax- payer assessee is always protected. When the case is that the source of income of the assessee is not disputed by the department and when it is seen that the assessee has paid all the taxes regarding her income and when the department has not brought out any malafide intention, then it cannot be said that the cash deposits were under the purview of unexplained cash credit. The department has not even applied the basic purpose of the scheme of demonetization in deciding the case of the assessee. The department has also not applied the welfare legislation concept in the case of the assessee and even on merits also as I have already examined since the source of income is explained there cannot

In the result, appeal of the assessee is allowed.