Balu Vignesh Vs ACIT (ITAT Chennai)
In the case of Balu Vignesh Vs ACIT, the Income Tax Appellate Tribunal (ITAT) Chennai addressed an appeal for the Assessment Year 2017-18 concerning a cash deposit of Rs. 53.23 lakh made by the assessee during the demonetization period. The Assessing Officer (AO) had added this amount under Section 69A of the Income Tax Act, claiming it as unexplained money, as the deposits were made after November 15, 2016, and the assessee failed to explain the source during the assessment proceedings. The Commissioner of Income Tax (Appeals) upheld this addition, as the petitioner did not provide supporting documents during the appellate process. In response, the assessee appealed to the ITAT.
The assessee, engaged in the textile business with a significant turnover, submitted that it had a sufficient cash balance as of November 8, 2016, to cover the impugned deposits. The AO accepted part of the cash source but rejected deposits made after November 15, 2016, on the grounds that they should have been deposited within a “reasonable period.” However, the ITAT found that the cash balance of Rs. 133.73 lakh as of November 8, 2016, was adequately documented in the assessee’s cash book and was audited under Section 44AB. The ITAT ruled that no law mandates depositing the entire amount within a specific time frame and concluded that the rejection of part of the cash deposits was arbitrary. As a result, the ITAT deleted the Rs. 53.23 lakh addition and directed the AO to re-compute the assessee’s income accordingly.
