Shreyas Co Op Credit Society Ltd Vs ITO (ITAT Ahmedabad)
The Income Tax Appellate Tribunal (ITAT), Ahmedabad, set aside the addition made under Section 69A read with Section 115BBE of the Income Tax Act in respect of cash deposits made during the demonetisation period and remanded the matter to the Assessing Officer (AO) for fresh examination. The Tribunal held that the addition could not be sustained merely because part of the cash deposits consisted of old denomination notes and that the relevant issue was whether the deposits represented genuine business receipts.
The assessee, a cooperative society, filed its return of income for Assessment Year (AY) 2017-18 declaring a total income of ₹21 lakh. The case was selected for scrutiny to examine large cash deposits made during the demonetisation period. According to the AO, total cash deposits of ₹8.50 crore were made in various bank accounts between 9 November 2016 and 30 December 2016. The assessee explained that cash deposits of ₹3.58 crore had been made during the period and were duly reported in the return of income. After examining the explanation, the AO accepted a substantial part of the deposits but treated ₹1.31 crore deposited in old denomination notes of ₹500 and ₹1,000 as unexplained money under Section 69A and completed the assessment under Section 143(3) by making the addition.
