Raju Ravichandran Vs ITO (ITAT Chennai)
In the case of Raju Ravichandran vs ITO, the Income Tax Appellate Tribunal (ITAT), Chennai, upheld the assessment order treating cash deposits of ₹16.20 lakh made during the demonetization period as unexplained income under Section 69A of the Income Tax Act, 1961. The assessee, engaged in egg trading under the name ‘Arav Tradings’, had deposited specified bank notes (SBNs) of ₹500 and ₹1000 denominations between 09.11.2016 and 31.12.2016, claiming these were sales proceeds. The Assessing Officer held that post-demonetization, such notes ceased to be legal tender, and the assessee’s business did not fall under any exempted category allowing continued acceptance of those notes.
The Tribunal agreed with the Assessing Officer and Commissioner of Income Tax (Appeals) that, as per RBI and Government notifications dated 08.11.2016, trading in old currency was prohibited from 09.11.2016 onwards. Since the assessee accepted and deposited demonetized currency after the cutoff date, it was not legally permissible, and thus, the cash was treated as unexplained and taxed under Section 115BBE. The ITAT found no merit in the appeal and dismissed it, holding the action of the tax authorities to be in accordance with the law.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
