Shri Tukaram Vs ITO (ITAT Raipur)
The ITAT Raipur allowed the assessee’s appeal against the order of the CIT(A)/NFAC for AY 2017-18 concerning an addition of Rs. 2,29,500 under Section 69A of the Income Tax Act. The Assessing Officer had treated cash deposits made in Specified Bank Notes (SBNs) during the demonetisation period as unexplained money, and the CIT(A) had upheld the addition. The assessee contended that the deposits represented receipts from the business of selling mobile recharge coupons, duly recorded in the books of account, and that acceptance of SBNs was not prohibited until 31.12.2016.
The Tribunal noted that the Revenue had accepted the assessee’s business, purchases, sales, and books of account, and had not brought any evidence of an alternative source of income. The only basis for the addition was that the deposits were made in SBNs during the demonetisation period. The Tribunal held that, when the business source of the cash deposits had not been disputed, the deposits could not be treated as unexplained money under Section 69A. Relying on its earlier decision in Payel Verma Vs. the Income Tax Officer, Ward-1(3), Bhilai (C.G.), involving identical facts, the Tribunal directed the Assessing Officer to delete the addition of Rs. 2,29,500. The appeal was accordingly allowed.
