Savery Transport Finance Limited Vs ACIT (ITAT Chennai)
Chennai: The Income Tax Appellate Tribunal (ITAT), Chennai bench, has provided relief to Savery Transport Finance Limited, a non-banking finance company (NBFC), by deleting an addition of ₹14.84 lakh made by the Assessing Officer (AO) on account of alleged unexplained cash deposits during the demonetization period. The Tribunal found that the cash deposits were duly recorded in the assessee’s books of account, which were audited and not rejected by the department. The ITAT also remitted the assessee’s claim for deduction under Section 80G back to the AO for fresh examination.
The appeal before the ITAT for the Assessment Year 2017-18 challenged two aspects of the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi. The first was the confirmation of the addition of ₹14.84 lakh, and the second was the denial of the deduction claimed under Section 80G of the Income Tax Act, 1961. The assessment in this case was framed by the AO under Section 143(3) read with Section 147 of the Act on December 31, 2019, following the reopening of the assessment.
During the assessment proceedings, the AO observed that Savery Transport Finance Limited had deposited a substantial amount of cash, totaling ₹1586.77 lakh, into its bank accounts between November 9, 2016, and December 30, 2016. This period coincided with the demonetization of specified bank notes (SBNs) of ₹500 and ₹1000 denominations. The AO, therefore, required the assessee to explain the source of these cash deposits.
