Shiva Goods Carrier Pvt Ltd Vs DCIT (ITAT Lucknow)
ITAT Lucknow held that addition towards cash deposited during demonetization period as unexplained deposit under section 68 of the Income Tax Act set aside for de novo proceedings.
Facts- In the case of M/s Shiva Goods Carrier Pvt. Ltd., assessment order was passed u/s. 143(3) of the Income Tax Act, 1961 whereby the assessee’s total income was determined at Rs.81,80,860/- as against returned income of Rs.34,20,860/-. In the aforesaid assessment order, an addition of Rs.47,60,000/- was made u/s 68 of the IT Act.
AO treated the aforesaid amount of Rs.47,60,000/- as unexplained deposit of specified bank notes i.e. (old bank notes of 500 and 1000 denominations (“SBN” for short) as unexplained; and invoked section 68 read with section 115BBE of the IT Act, resulting in the aforesaid addition of Rs.47,60,000/-.
CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- We set aside the impugned appellate orders of the learned CIT(A) in each of the two appeals before us; and we restore the issue in dispute in the present two appeals before us, regarding aforesaid addition of Rs.47,60,000/- in the case of M/s Shiva Goods Carrier Pvt. Ltd. in I.T.A. No.258/Lkw/2020 and regarding aforesaid addition of Rs.2,96,94,000/- in the case of M/s Shiva Veener (India) Pvt. Ltd. in I.T.A. No.256/Lkw/2020; to the file of the respective Assessing Officers with the direction to pass de nono orders in accordance with law, after providing reasonable opportunities to the respective assessees and after due verification of facts and circumstances. All the grounds of appeal in the two appeals before us are treated as disposed of in accordance with the aforesaid directions.
FULL TEXT OF THE ORDER OF ITAT LUCKNOW
A) Appeal vide I.T.A. No.258/Lkw/2020 has been filed by M/s Shiva Goods Carrier Pvt. Ltd. for assessment year 2017-18 against impugned appellate order dated 30/06/2020 of learned CIT(A).
(B) In the case of M/s Shiva Goods Carrier Pvt. Ltd., assessment order dated 28/12/2019 was passed u/s 143(3) of the Income Tax Act, 1961 (“IT Act” for short) whereby the assessee’s total income was determined at Rs.81,80,860/- as against returned income of Rs.34,20,860/-. In the aforesaid assessment order an addition of Rs.47,60,000/- was made u/s 68 of the IT Act. The relevant portion of the assessment order is reproduced as under:
“5. On the evening of 8th of November, 2016 the Government of India around 8:10 P.M. informed the citizens that all 1500 and 1000 banknotes of the Mahatma Gandhi Series would be ceased to be legal tender in India from midnight i.e. from 9 November 2016 meaning thereby these notes would not be acceptable for transactions from midnight onwards. However, Government also assured the citizens and taxpayers that there was no need to panic and that they can deposit old 500 and 11000 banknotes in their bank accounts till 30/12/2016. Accordingly, the Reserve Bank of India (RBI) had withdrawn Legal Tender character of old bank notes in the denomination of Rs 500/- and Rs 1000/- w.e.f. 9 th November, 2016, through Specified Bank Notes (cessation of liabilities) Act, 2017 and Specified Bank Notes (deposit of confiscated notes) Rules, 2017.
6. In this case, during the demonetisation period i.e. from 09/11/2016 till 30/12/2106, assessee had deposited old 500 and I 1000 banknotes [also referred as specified bank notes or in short SBNs] to the tune of Rs. 2,82,60,000/- in his bank accounts. The details of cash deposited are given below,
