Loading judgment…
Facts
The assessee, a primary agriculture co-operative society, received deposits from its members during demonetization. The AO made an addition under Section 68 for these deposits as the assessee could not provide necessary material. The CIT(A) confirmed the addition.
Held
The Tribunal set aside the orders of the lower authorities and relegated the issue to the AO for fresh adjudication. The assessee was allowed to file the paper book before the AO, and the AO was directed to consider fresh evidence and decide the matter afresh.
Key Issues
Whether the addition made under Section 68 for deposits received during demonetization is justified without considering fresh evidence sought to be filed by the assessee.
Sections Cited
68, 80P
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, CHANDIGRH BENCH, ‘SMC’ CHANDIGARH
Before: SHRI RAJPAL YADAV
Assessee by : Shri Harshit Chawla, Advocate and Shri Vagish Sharma, CA Revenue by : Smt. Ranjit Kaur, Addl. CIT Date of Hearing : 28.01.2025 Date of Pronouncement : 28.01.2025 PHYSICAL HEARING O R D E R The assessee is in appeal before the Tribunal against the order of Ld. CIT(A) dated 06.09.2023 passed for assessment year 2017-18.
The assessee has taken three grounds of appeal out of which ground No. 3 is a general ground which does not call for recording of any specific finding. In Ground No.1, grievance of the assessee is that exemption under Section 80P has not been granted to the assessee. In Ground No.2, A.Y.2017-18 2 grievance of the assessee is that ld. CIT(A) has erred in confirming the addition of Rs.45,96,000/- which was added by the AO with the aid of Section 68 of the Income Tax Act.
The assessee is a primary agriculture Co-operative Society.
It has taken deposits from its members during demonetization and deposited that money in specific bank accounts. A perusal of the record would reveal that on 11.11.2016, Rs.24,39,500/- were deposited in the bank, on 12th and 13th the assessee had deposited Rs.19,28,500/- and Rs.2,28,000/- respectively. In this way, a total deposit of Rs.45,96,000/- was made. The AO sought explanation of this deposit. It appears that assessee could not file necessary material before the AO. Thus, AO has made an addition under Section 68 of the Income Tax Act.
Appeal to the CIT(A) did not bring any relief to the assessee.
Before the Tribunal, assessee sought permission to file a Paper Book containing 532 pages. The assessee wants to place on record copy of the RBI Notification bearing No. RBI/16-17/130 dated 14.11.2016 whereby assessee was A.Y.2017-18 3 prohibited to receive any deposit from its members. In brief, the case of the assessee is that all monies were taken by it before this appointed date and a complete ledger account alongwith cash book were maintained by the assessee which due to some unavoidable reasons, could not be submitted before the lower authorities. It is an additional evidence before the Tribunal, it appears that some of the papers were filed before ld. CIT(A) but it is not discernable whether any permission was sought under Rule 46A or not or CIT(A) has called for these documents according to his powers contemplated upon him under sub-rule 4 of Rule 46A.
Considering nature of the activities of the assessee, I deem it appropriate to set aside both the impugned orders and relegate this issue to the file of ld. AO for fresh adjudication. The assessee will be at liberty to file the Paper Book sought to be filed before the Tribunal, before AO. The AO will first decide whether assessee was competent to receive all currency notes after 08.11.2016 upto 14.11.2016 from its members. The ld. AO will take into consideration the judgement of ITAT Pune, Ahmedabad, Bangalore etc. A.Y.2017-18 4 which are being placed in this Paper Book. In other words, the observation made by me will not impair or injure the case of the AO and will not cause any prejudice to the defence/explanation of the assessee. The AO shall entertain the fresh evidence if submitted by the assessee and decide the issue in accordance with law.
In result, the appeal of the assessee is allowed for statistical purposes.