Case Law Details
Sheo Chand Yadav Vs ITO (ITAT Delhi)
Introduction: The Income Tax Appellate Tribunal (ITAT) in Delhi recently gave a verdict in the case of Sheo Chand Yadav vs ITO. The primary focus was on the cash deposits made in the bank accounts of the assessee during the demonetization period. The tribunal ultimately ruled in favor of the assessee, thereby deleting the income tax addition that was initially imposed.
Background of the Case: Sheo Chand Yadav, a retired Defence Service official, and his spouse, Mrs. Manju Yadav, a retired teacher, ran a news agency distributing newspapers through vendors at Bhiwadi. Both are regular income tax assesses. The Assessing Officer (AO) had earlier added an amount of Rs. 20,94,855 as unexplained money under Section 69A of the Income Tax Act, relating to cash deposits during the demonetization period. This addition was later confirmed by the CIT(A).
The Assessee’s Argument: Sheo Chand Yadav contended that the cash deposits originated from their newspaper distribution business. The money was received from sub-vendors and deposited in their joint bank account. Due to the ongoing festive season, the cash could not be deposited in full immediately and was deposited in tranches for safety reasons.
Analysis of ITAT’s Ruling: The ITAT scrutinized the entire bank statement, income tax returns, and other relevant documents. They concluded that the source of the cash deposit in the bank account had been undisputedly proved to be legitimate. Therefore, the ITAT directed that the income tax addition made by the AO should be deleted.
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