ACIT Vs Mohamad Israil Cold Storages Pvt. Ltd (ITAT Patna)
The Income Tax Appellate Tribunal (ITAT), Patna, in the case of ACIT Vs Mohamad Israil Cold Storages Pvt. Ltd., has ruled that cash deposits made during the demonetization period, which are duly recorded in the assessee’s books of account, cannot be treated as unexplained money under Section 69A of the Income Tax Act, 1961, without the Assessing Officer first rejecting the books of account. This decision upholds the principle that income recorded in the books cannot be added again under a different section without a finding that the books are not genuine or incorrect.
The case involved an assessee whose income tax return for Assessment Year 2017-18 was selected for scrutiny regarding cash deposits made during the demonetization period (November 8, 2016, to December 31, 2016). The Assessing Officer observed a significant increase in cash deposits totaling Rs. 1,13,96,000/- during this period compared to the average cash balance maintained earlier. Citing the assessee’s failure to provide specific supporting documents like party-wise invoices and receipts to justify the sudden rise in cash, the AO concluded that the cash balance was inflated. Consequently, the entire amount deposited was treated as unexplained money under Section 69A and taxed at 60% under Section 115BBE.
