Rajkumar K. Doshi HUF Vs ITO (ITAT Pune)
The Income Tax Appellate Tribunal (ITAT), Pune Bench, in the case of Rajkumar K. Doshi HUF vs. ITO, allowed the assessee’s appeal and deleted the addition of {Rs. 14,00,000} made by the Assessing Officer (AO) as unexplained money under Section 69A of the Income-tax Act, 1961. The amount represented cash deposited in the HUF’s bank account during the demonetization period (A.Y. 2017-18).
The Tribunal ruled that once the source of the cash is established to be genuine and accounted for in the books of account, the mere fact that the cash was retained for a long period—in this case, since the Financial Year (F.Y.) 2013-14—is not a valid ground to raise doubts and sustain an addition.
Factual Background
The assessee, a Hindu Undivided Family (HUF), filed its return for A.Y. 2017-18. The case was selected for scrutiny after information revealed the HUF had deposited {Rs. 14} lakh in cash into its Central Bank of India account during the demonetization period.
During assessment proceedings, the HUF explained that the source of the cash deposit was its closing cash in hand, which stood at {Rs. 14,94,983} as of April 1, 2016. The majority of this cash balance, totaling {Rs. 12,61,880}, was received by the HUF in F.Y. 2013-14 as a refund of share application money from Pratap Tea Company Pvt. Ltd. (PTCPL), where the HUF Karta was a director. The balance was attributed to accumulated income and past savings.
