DALSUKHBHAI JIVRAJBHAI SAVALIA,LILIYA MOTA vs. ITO WD 3(1)(4), RAJKOT-AMRELI, AMRELI

Facts

The assessee filed a revised return for AY 2017-18 and was found to have deposited Rs.32,93,205/- cash in three bank accounts during the demonetization period. The Assessing Officer made an addition of the entire amount u/s 69A as unexplained cash, which the CIT(A) partly confirmed by sustaining 30% of the addition (Rs.9,87,961/-) after considering the assessee's agricultural income and mother's accumulated savings.

Held

The tribunal found that the assessee provided substantial evidence for the source of cash deposits, including agricultural income, mother's affidavit, and cash withdrawals. Considering these explanations, the tribunal reduced the sustained addition from 30% to 8% of the total deposit, amounting to Rs.2,63,456/-, and directed that this amount be taxed under normal income tax rates, not under section 115BBE.

Key Issues

Whether the addition for unexplained cash deposits made during demonetization was justified and if the quantum of addition sustained by the CIT(A) was appropriate, along with the applicable section for taxation.