PACHIYAPPAN SELVAN,DHARMAPURI vs. ITO, WARD 1, DHARMAPURI

The AO has made addition of cash deposits of SBN notes during demonetization period from 09.11.2016 to 30.12.2016 in Vijaya Bank, Dharmapuri Bank account of Rs. 10,52,500/- u/s. 69A of the Act on the ground that the assessee has failed to explain the cash deposited on various dates from 10.11.2016 to 30.12.2016 . The Ld. CIT(A) has confirmed the addition stating that the assessee has not given any logical explanation.

The Ld. Authorized Representative (A.R) of the assessee before us has submitted that cash deposits were made out of the business receipt and are duly recorded in the books of accounts. The Ld. AR has submitted a copy of books of account in support of his contention.

The Ld. Departmental Representative (DR), on the other hand, has relied on the orders of lower authorities.

We have heard the rival submissions, and perused the materials available on record. A.O has made the addition applying the human probability test that the assessee should have deposited the cash on single day rather than in piece meal on various dates. The Ld CIT (A) has also confirmed the addition stating that assessee has not given any logical explanation. Assessee before us has explained that the cash deposit was out of regular business receipt and submitted copy of audited books of account and ledger accounts explaining the source of cash deposit. We are of the opinion that the matter should be restored back to the file of A.O to examine the books of accounts and decide the case on merit. We also direct the assessee to appear before the A.O on the date of hearing without fail. In view of the above, the appeal filed by the assessee is allowed for statistical purposes.