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Facts
The assessee, a partnership firm, challenged an addition of Rs. 11,50,000/- made on account of unexplained cash credits, specifically related to Specified Bank Notes (SBNs) deposited during the demonetization period. The Assessing Officer (AO) and the CIT(A) upheld this addition, viewing the deposits as suspicious given the timing and manner of deposit.
Held
The Tribunal held that since the authorities below accepted a significant portion of the cash deposit (Rs. 37,74,000/-) as valid, it was difficult to accept their reasoning for deeming the remaining amount of Rs. 11,50,000/- as unexplained. The Tribunal found that the assessment order and impugned order were not justified in applying the 'Human Probability Test' to the remaining sum.
Key Issues
Whether the addition of Rs. 11,50,000/- on account of unexplained cash credits, arising from SBN deposits during demonetization, was justified when a substantial part of the total deposit was accepted as valid?
Sections Cited
143(3), 145(3), 68, 69A
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Income Tax Appellate Tribunal, JAIPUR BENCHES, “B-Bench” JAIPUR
Before: DR. M.L. MEENA, AM, & SHRI NARINDER KUMAR, JM vk;dj vihy la-@ITA No. 127/JPR/2024
For the foregoing reasons and discussion, finding merit in the contentions raised on behalf of the assessee as regards the only challenge to the addition of Rs.11,50,000/- on account of unexplained cash credits, we deem it a fit case where said addition deserves to be deleted. We order accordingly.
Consequently, this appeal is allowed to this extent and the impugned order by Learned CIT(A) and the impugned assessment framed by Learned Assessing Officer is set aside as regards the said addition of Rs.11,50,000/-.
Shrey Associates vs. ACIT Learned Assessing Officer to give effect to this decision in accordance with law.
Order pronounced under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 by placing the details on the notice board.