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Facts
The Assessing Officer made an addition of Rs. 12,90,000/- under section 68 of the Income Tax Act related to cash deposits during the demonetization period. The assessee provided bank statements, cash flow statements, bank withdrawal certificates, confirmation letters, and details of Kisan Credit Card loan repayments to explain the source of the deposits.
Held
The Tribunal held that the addition made by the Assessing Officer did not sustain. The assessee had provided sufficient evidence to explain the cash deposits, including prior withdrawals and other financial transactions.
Key Issues
Whether the addition made under section 68 for cash deposits during demonetization is sustainable when the assessee provides documentary evidence to explain the source of funds.
Sections Cited
68
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Income Tax Appellate Tribunal, SURAT “SMC” BENCH, SURAT
Before: DR. B.R.R. KUMAR, VICE- & MS. SUCHITRA KAMBLE
O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER:-
This is an appeal filed against the order dated 20-01-2024 passed by National Faceless Appeal Centre (NFAC), Delhi for assessment year 2017-18.
Delay condoned.
The assessing officer made addition of Rs. 12,90,000/- u/s. 68 of the Act related to cash deposits during demonetization period. The assessee has given the bank statement before the A.O. as well as before the CIT(A) explaining details of cash withdrawals prior to demonetisation along with the cash deposits from time to time. Before us, the assessee also gave the cash flow statement of the said withdrawals and cash deposits alongwith Dharmendrasinh Ranjit Chavda Vs. ITO Asst. Year : 2017-18 - 2– bank statement. Before us, the assessee submitted the cash withdrawal certificate issued by Bank of India as well as confirmation letters from his brothers. The assessee also gave the details of Kisan Credit Card (KCC) loan repayment for which the assessee made cash deposits prior to demonetization as well. Therefore, we hold that the addition does not sustain.
In the result, the appeal of the assessee is allowed.
The order is pronounced in the open Court on 23.01.2026