Addition as unexplained cash deposits unjustified as source of cash deposit demonstrated

DCIT Vs Atulah Contractors and Construction Pvt. Ltd. (ITAT Delhi)

ITAT Delhi held that addition under section 68 of the Income Tax Act towards unexplained cash deposits unjustified as source of cash deposit successfully demonstrated by the assessee.

Facts- In the post-demonetization period, the Police intercepted two vehicles carrying cash amounting to Rs. 2,22,76,000/- which was belonging to M/s Omaxe Ltd. The said cash was requisitioned u/s. 132A by the Income Tax Authority and a survey u/s. 133A was also conducted at the office premises M/s Omaxe Ltd, wherein certain documents were impounded. The AO has stated that these impounded pages contain noting’s of cash balances of various group companies belonging to the Omaxe Group, to which the assessee company also belongs. The AO asked the assessee for justification/ source of the excess cash so deposited after demonetization.

The AO, not accepting the explanation, made addition of Rs. 2,40,00,000 on account of unexplained cash deposits u/s. 68 of the Income Tax Act by observing that the assessee has failed to explain the source of cash deposited during demonetization period.

CIT(A) granted relief to the assessee.

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