Ayesha Steels (P) Ltd Vs ITO (ITAT Delhi)
ITAT Delhi held that cash deposited during demonetization period cannot be added as unexplained cash deposit under section 68 of the Income Tax Act since sufficient explanation of source of cash deposit provided by the assessee. Accordingly, addition deleted and appeal allowed.
Facts- The AO noted that there were substantial cash deposits made by the appellant during the demonetization period and cash deposits in SBN during demonetization amounted to Rs 1.22 crore besides other cash deposits of Rs 69.80 lakhs during the relevant period. The case was heard on different dates and various queries were raised to the appellant by the AO. Post verification, AO made addition towards unexplained cash deposits of Rs 1.22 crores u/s 68 r.w.s. 115BBE of the Act. CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Held that there cannot be two different treatments in regard to the same amount. The addition has been made and thereafter sustained only on surmises and conjectures. No adverse material/no independent enquiry made: The addition has been made only on the basis of surmises and conjectures. In this case, there is no adverse report/ material/document etc. to suggest that the appellant has taken some kind of accommodation entry or has routed its own money. No independent inquiry has been made by the lower authorities. It is a trite law that, in case the explanation cited by the assessee is not considered as tenable then the AO should specifically bring some material to refute the same. In this case, there is none. In view of above, in our view, there is sufficient explanation of source of cash deposit being deposited during the demonetization period, therefore, in our considered opinion, the addition in dispute deserve to be deleted. We hold and direct accordingly.
