Abdul Farooq Vs ITO (ITAT Amritsar)
Abdul Farooq filed an appeal before the ITAT Amritsar against the order of the Addl./JCIT CIT(A)-1, Bengaluru dated 28.03.2024, which upheld the addition of Rs. 3.88 lakhs to his income by the Assessing Officer under Section 144 of the Income Tax Act, 1961. The addition arose from deposits of specified bank notes (SBNs) in the assessee’s bank accounts during the demonetization period from November to December 2016. Abdul Farooq is engaged in SIM card distribution and mobile voucher recharge under the trade name Chowdhary Communications and maintained two bank accounts with Jammu & Kashmir Bank.
During the period 08.11.2016 to 31.12.2016, the assessee deposited a total cash amount of Rs. 15.59 lakhs, which included SBNs. The Assessing Officer allowed the opening cash balance as of 08.11.2016 but added Rs. 3.88 lakhs to the income on account of SBN deposits post-08.11.2016. The CIT(A) upheld this addition.
In the appeal before the Tribunal, the assessee submitted a written statement along with a bank certificate and the revised Gazette Notification No. 2653 dated 08.11.2016. The certificate indicated total cash deposits in November 2016 as Rs. 4.10 lakhs. The Gazette Notifications, including subsequent amendments, allowed certain transactions using SBNs, including prepaid mobile top-ups up to Rs. 500, effective until 15.12.2016.
