ZULU TELE SERVICES PRIVATE LIMITED,CHANDIGARH vs. INCOME TAX OFFICER, WARD - 1(4), CHANDIGARH

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ITA 1097/CHANDI/2024Status: DisposedITAT Chandigarh30 May 2025AY 2017-18Bench: SHRI SANJAY GARG (Judicial Member)1 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition made by the lower authorities, confirming the CIT(A)'s decision, was not sustainable. The Tribunal found that the assessee had demonstrated sufficient cash in hand which was deposited due to the demonetization scheme announcement.

What were the facts?

The assessee deposited Rs. 30,23,500/- in their bank account during the demonetization period in October 2016. The assessee claimed this was from sufficient cash in hand, sourced from a new business line of manpower service provision and also for disbursing wages.

What were the issues?

Whether the cash deposit made during the demonetization period, claimed to be from unexplained sources, can be treated as income under Section 69A of the Income Tax Act, 1961, when the assessee demonstrates sufficient cash in hand.

Which sections of the Income-tax Act were involved?

Section 69A

AI-generated summary — verify with the full judgment below

Order The present appeal has been preferred by the assessee against the order dated 26-09-2024 passed by the Ld. Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi[hereinafter referred to as ‘CIT(A)’], for the Assessment Year 2017-18.

2.

The Assessee in this appeal is aggrieved by the action of the CIT(A) in confirming the addition made by the Assessing Officer (A.O.) of Rs. 30,23,500/-u/s 69A of the Income Tax Act, 1961 by 647-Chd-2023 Sher Singh, Yamunanagar 2 treating the cash deposit in the bank account during the demonetization as income from unexplained sources.

3.

Ld. counsel for the Assessee has submitted that the Assessee had deposited the amount of Rs. 30,23,500/ - in its bank account during the demonetization period in the month of October, 2016. Ld. counsel for the Assessee has referred to the various documents in the Paper Book to show that the Assessee had sufficient cash in hand and the assessee had to deposit the aforesaid amount in the bank account on the relevant date as the government had announced the demonetization scheme. Regarding the sources of the cash deposits, the Ld. counsel has demonstrated that during the relevant financial year, the assessee had adopted the new line of business i.e. man power service Provider. It has also been explained that the assesssee was required to keep the sufficient cash in hand for the purposes of disbursal of wages/salary to labour/employees working with the Assesssee.

4.

The turnover of the Assesee for the year under consideration was increased to Rs. 8,53,37,339/-. as compared to immediately preceding year A.Y. 2205-16 of Rs. 49,31,608/- The Assessee during the year earned gross profit of Rs. 75,33,921/- and net profit of Rs. 53,89,619. The Ld. counsel has demonstrated that the 647-Chd-2023 Sher Singh, Yamunanagar 3 assessee had sufficient cash in hand which was deposited by the Assessee because of the announcement of the demonetization scheme.

5.

Ld. D.R. has not rebutted the aforesaid factual position.

6.

In view of the above discussion, the impugned addition made/confirmed by the lower authorities is not sustainable and the same is ordered to be deleted.

7.

In the result, the appeal of the Assessee stands allowed.

Order pronounced on 30-05-2025.

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