Bhawna Puri Vs ITO (ITAT Chandigarh)
Demonetisation Cash Deposits – ITAT Recognises Agricultural Reality, Sustains Only ₹10 Lakh Out of ₹36.16 Lakh Addition
Assessee declared income of ₹5.21 lakh & agricultural income of ₹5.50 lakh. During demonetisation, she deposited ₹47.89 lakh in cash in her bank accounts. AO accepted ₹11,73,028 as explained (gifts, agricultural income, tuition/household receipts) but treated the balance ₹36,16,472 as unexplained u/s 68, & CIT(A) confirmed the addition.
Assessee argued that she & her family jointly owned an apple orchard leased for 7 years, & agricultural receipts were retained in cash & later deposited during demonetisation. It was also claimed that retaining cash in rural areas was common & supported by lease agreement & affidavits.
ITAT acknowledged the agricultural background & plausibility of partial cash retention but highlighted key deficiencies:
- Orchard was jointly owned by 6 family members – assessee could not claim entire income.
- No proof of actual receipt or cash retention for 5-7 years.
- No confirmation from lessee, no mandi receipts or sale bills.
- Entire deposits were in demonetised ₹500/₹1000 notes, which weakens the claim of gradual accumulation over years.
The Tribunal held that although the assessee’s explanation had some merit, the evidence was insufficient to justify the whole amount. However, the AO was excessive in taxing the entire balance.
