ITO Vs Prathamika Krishi Pattina Sahakari Sangh Niyamit (ITAT Bangalore)
ITAT Bangalore in the case of cash deposit during demonetization period directed assessee to file KYC of the depositors and accordingly directed AO to verify the same and allow if found in order.
Facts- During the course of assessment proceedings, it was noticed that the assessee has deposited cash in old currency denomination of Rs.500 & 1,000 in its bank account and it was also noted that from 09.11.2016 the denomination of Rs.500 and 1,000 currency notes were not in operation, in spite of which the assessee accepted from its customers the said amount was deposited in its bank account. Various instructions/notifications were issued by GOI/RBI in this regard and assessee was not authorized to collect money in denomination of Rs.500 & 1,000 in spite of which it accepted. In this regard, it was noticed that the assessee deposited cash totalling to Rs.73,18,542 in old band currency in its three bank accounts. A show cause notice was issued to the assessee. In this regard assessee submitted reply and submitted proof of depositors. After considering the entire submission and Gazette Notification/Instructions issued by Govt. of India and RBI, the AO added the amount u/s. 68 and applied tax rate u/s. 115BBE of the Act.
