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Facts
The assessee, an individual who had not filed his return of income, deposited ₹ 30,70,000 during the demonetization period. The Assessing Officer made an addition of ₹ 34,53,862 under section 69 of the Income Tax Act, 1961, due to unexplained cash deposits.
Held
The Tribunal found that the assessee could explain ₹ 20 lakh of the deposits through bank entries. The Tribunal decided to grant 50% relief to the assessee on the remaining addition, confirming the other 50%.
Key Issues
Whether the addition made by the Assessing Officer under section 69 on account of unexplained cash deposits during demonetization was justified, and the extent of relief to be granted.
Sections Cited
69, 142(1), 144
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SHRI V. DURGA RAO
Captioned appeal by the assessee is emanating from the impugned order dated 30/01/2024, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2017–18.
The assessee has raised following grounds:–
“1. The assessee Mohammad Ismail Haji Sheikh Abdullah is a deals in Travell service. 2. The AO issued notices U/s 142(1) of the Income Tax Act 1961 but not served to assessee .nor any e mail id to appellant.
2 Mohammad Ismail Haji Sheikh Abdullah ITA no.209/Nag./2024 3. The Ld. AO passed order with addition of Rs 3070100/- and in appeal relief given of Rs 2000000/- balance of Rs 1070100/- is taxable as per order of Income Tax Department dated 30/01/2024.
4. In this order not mention of our full submission I e balance sheet, registration certificate of vehicle.
In order Ground no 1& 2 mention that During assessment proceedings the appellant failed to explain the source of cash deposit whereas the order passes u/s 144 of the income tax act. Due to notice not properly served.”
The only issue that I need to adjudicate in this appeal is, whether or not the Assessing Officer was justified in making addition under section 69 of the Income Tax Act, 1961 ("the Act") at ` 34,53,862, on account of unexplained cash deposit during demonetization.
The assessee is an Individual who has not filed his return of income for the present year under consideration. The assessee, during the demonetization period, deposited ` 30,70,000, including cash deposited of ` 10,00,000, in old currency. The Assessing Officer issued statutory notices, however, the assessee did not respond to it. Hence, the Assessing Officer obtained bank statement of the account in which the assessee deposited cash and completed the assessment under section 144 of the Act determining total income at ` 30,70,000, which resulted in issuance of demand of ` 34,53,862, by making addition under section 69 of the Act, which was added to the total income of the assessee. Consequent upon issuance of such assessment order passed by the Assessing Officer, the assessee preferred appeal before the first appellate authority.
5. The learned CIT(A) granted part relief to the assessee holding that the assessee could explain the source of ` 20 lakh only through bank entries,
3 Mohammad Ismail Haji Sheikh Abdullah ITA no.209/Nag./2024 hence the learned CIT(A) accepted ` 20 lakh and the balance of ` 10 lakh was sustained. Accordingly, the learned CIT(A) granted relief of ` 20 lakh out of ` 30,70,100.
I have heard the rival arguments, perused the material available on record and gone through the orders of the authorities below. Keeping in view the overall facts and circumstances of this case and to meet the ends of justice, I find it appropriate to grant 50% relief to the assessee i.e., 50% of ` 30,70,100 which comes to ` 5,35,500. Balance addition of 50% i.e., ` 5,35,500, is hereby confirmed. The Assessing Officer is directed to re– compute the computation of income accordingly. The assessee gets part relief.
In the result, assessee’s appeals stands partly allowed. Order pronounced in the open Court on 21/03/2025