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Facts
The assessee filed a return declaring an income of Rs. 3,28,000/- for AY 2017-18. The AO made an addition of Rs. 43 Lakhs, representing cash deposited during demonetisation, under section 68 and invoked section 115BBA. The CIT(A) upheld the addition without verifying details.
Held
The Tribunal noted that the authorities below failed to consider relevant CBDT circulars regarding the verification of demonetized cash deposits. The issue was remitted to the AO to verify sales made by the assessee that were deposited into bank accounts, considering applicable circulars.
Key Issues
Whether the addition made by the AO on account of demonetized cash deposits is sustainable without considering relevant CBDT circulars. Whether the CIT(A) properly verified the additions.
Sections Cited
143(2), 142(1), 133(6), 68, 115BBA
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, SMC-‘B’ BENCH : BANGALORE
Before: SHRI CHANDRA POOJARI & SMT. BEENA PILLAI
ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeal arises out of the order dated 23.02.2024 passed by NFAC, Delhi for A.Y. 2017-18. 2. Brief facts of the case are as under: 2.1 The assessee is an individual and filed his return of income for A.Y. 2017-18 on 29/03/2018, declaring a total income of Page 2 of Rs.3,28,000/- under the head Income from Business and Profession. The return was processed by CPC and selected for scrutiny through CASS. Notices u/s. 143(2) and 142(1) were served on the assessee requesting to furnish the details.
2.2 As the assessee failed to furnish the relevant details as called for during the assessment proceedings. The Ld.AO thus issued 133(6) to the bank in which cash was found to be deposited during the demonetisation period amounting to Rs. 43 Lakhs. The Ld.AO made addition in respect of the amount deposited during the demonetisation period in the hands of the assessee u/s. 68 of the act and invoked the provisions of section 115BBA.
2.3 Aggrieved by the order of the Ld.AO, assessee preferred appeal before the Ld.CIT(A). The Ld.CIT(A) without verifying the details upheld the addition made by the Ld.AO.
2.4 Aggrieved by the order of the Ld.CIT(A), the assessee preferred appeal before this Tribunal.
We note that the authorities below have not considered the CBDT circulars in order to verify the same. Even the Ld.AO during the assessment proceedings has not considered the relevant CBDT circulars that was issued for the purposes of verifying the demonetized cash deposited during the year under consideration. In the interest of justice, we remit this issue to the Ld.AO to verify the sales made by the assessee that is deposited into the bank accounts during the year under Page 3 of consideration in accordance with the following circulars whichever is applicable to the facts of the case. a) The 1st instruction was issued on 21/02/2017 by instruction number 03/2017. b) The 2nd instruction was issued on 03/03/2017 instruction number 4/2017. c) The 3rd instruction was in the form of a circular dated 15/11/2017 in F.No. 225/363/2017-ITA.II and the last one dated 09/08/2019 in F.no.225/145/2019-ITA.II.
The assessee is also directed to furnish all relevant evidences in support of its claim. The Ld.AO shall verify the documents and consider the claim in accordance with law. Needless to say that proper opportunity of being heard must be granted to assessee in accordance with law. Accordingly, the grounds raised by the assessee stands partly allowed. In the result, the appeal filed by the assessee stands partly allowed. Order pronounced in the open court on 18th July, 2024.