Bhola Singh Vs ITO (ITAT Patna)
The ITAT Patna allowed the assessee’s appeal against the order of the CIT(A) for AY 2017-18. The Assessing Officer had completed the assessment under Section 144 and made an addition of ₹6,08,500 under Section 69A read with Section 115BBE by treating cash deposits made during the demonetisation period as unexplained money. The CIT(A) upheld the addition.
The Tribunal proceeded to decide the appeal after hearing the Departmental Representative, as none appeared for the assessee. It noted that the assessee was an agriculturist, a business correspondent of the Central Bank of India, and engaged in trading raw materials for cattle feed and maize.
Regarding the deposit of ₹1,00,000 in the KCC account, the Tribunal noted the assessee’s explanation that the amount represented agricultural sale proceeds intended for the purchase of seeds, fertilizers, and other agricultural inputs during the harvesting season and was deposited during demonetisation. Considering the assessee’s activities and the amount involved, the Tribunal held that the explanation ought to have been accepted.
For the deposits of ₹4,45,000 and ₹54,500 in the OD and SB accounts, the Tribunal noted the assessee’s claim before the CIT(A) that cash deposits followed a consistent turnover pattern in earlier assessment years and remained regular before, during, and after demonetisation. Considering the nature of the assessee’s activities and the consistency of the deposits, the Tribunal deleted the entire addition of ₹6,08,500. The appeal was allowed.
