Demonetization Cash Deposit Addition Unsustainable on Mere Suspicion: ITAT Chennai

J.K Jewel Craft Vs ITO (ITAT Chennai) The Income Tax Appellate Tribunal (ITAT) Chennai ruled in favor of J.K. Jewel Craft in an appeal against the addition of Rs.53.02 lakh as unexplained investment by the Assessing Officer (AO) for the assessment year 2017-18. The AO had questioned cash deposits made during the demonetization period, arguing that the firm’s recorded cash balance of Rs.26.97 lakh as of November 8, 2016, did not justify the total deposit of Rs.80 lakh. The firm explained that Rs.7.59 lakh came from cash sales and Rs.45.43 lakh was reintroduced by partners from prior withdrawa...