ITO Vs CD Patani Nagri Sahkari Pat Sanstha (ITAT Pune)
The case ITO Vs CD Patani Nagri Sahkari Pat Sanstha concerns an appeal by the Income Tax Department against the order of the Commissioner of Income Tax (Appeals) [CIT(A)]. The appeal challenged the CIT(A)’s decision to delete an addition of Rs. 1,21,99,435 made by the Assessing Officer (AO). This amount was deposited in the assessee’s bank account during the demonetization period, and the AO had treated it as an “unexplained cash credit” under Section 68 of the Income Tax Act, 1961, read with Section 115BBE. The assessee in this case is a cooperative credit society that provides credit facilities and accepts deposits from its members.
Background of the Case
During the scrutiny of the assessee’s income tax return for the Assessment Year 2017-18, the AO discovered that the society had accepted old currency notes totaling Rs. 1,21,99,435 from its members after November 8, 2016, when demonetization was announced. The society provided the AO with a detailed list of its members who had made these deposits. The society argued that since it is a cooperative credit society, it could not be held responsible for the creditworthiness of its members who deposited the cash. The society asserted that it had met the requirements of Section 68 by providing the identity of the depositors and explaining the genuineness of the transactions. It further contended that the AO could have issued summons and conducted independent inquiries if there were any doubts.
