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Facts
The assessee's appeal for AY 2017-18 arose against an order passed under section 143(3) of the Income Tax Act. The Assessing Officer had made an addition of Rs. 3,02,700/- on account of unexplained cash deposits during demonetization.
Held
The Tribunal noted that the assessee's balance sheet for the preceding assessment year showed cash in hand of Rs. 32,42,000/-, which was accepted. It was inferred that the cash deposits in question were re-deposits of this accepted amount, and therefore, the addition at a flat rate of 10% was not justified.
Key Issues
Whether the addition made on account of unexplained cash deposits during demonetization was justified when the assessee had declared a higher amount of cash in hand in the preceding assessment year, which was accepted.
Sections Cited
143(3)
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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Sh. Satbeer Singh Godara
ORDER This assessee’s appeal for Assessment Year 2017-18 arises against the Addl./JCIT(A)-1, Visakhapatnam’s DIN & order No. ITBA/APL/S/250/2025-26/1083034463(1) dated 26.11.2025, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
It emerges during the course of hearing that the learned Assessing Officer appears to have framed his impugned assessment in the assessee’s case on 18.12.2019 assessing her cash deposits during demonetization amounting to Rs.27,00,000/- as unexplained; which in turn, have been subjected to 10% addition thereof in the lower appellate findings; coming to Rs.3,02,700/- in issue.
Faced with this situation, learned counsel has invited the tribunal’s attention not only to assessee’s balance sheet in the preceding assessment year declaring cash in hand amounting to Rs.32,42,000/- but also the same stood accepted in the assessment order dated 20.12.2018. The necessary inference which would arise in the given facts is that the assessee has re-deposited her cash in hand this could not have been assessed at a flat rate of 10% in the lower appellate discussion. The impugned addition stand deleted.