Arjunsinh Harisinh Thakor Vs ITO (ITAT Surat)
The Income Tax Appellate Tribunal (ITAT) Surat Bench has partially allowed an appeal filed by Arjunsinh Harisinh Thakor against an order from the National Faceless Appeal Centre (NFAC) for the Assessment Year 2017-18. The case primarily involved an addition of Rs. 31,42,500 made by the Income Tax Officer (ITO) under Section 68 of the Income Tax Act, 1961, for unexplained cash credits during the demonetization period, and the subsequent application of a higher tax rate under Section 115BBE.
Background of the Case
Arjunsinh Harisinh Thakor, the assessee, filed his income tax return for AY 2017-18, declaring an income of Rs. 8,48,840. His case was selected for limited scrutiny due to significant cash deposits during the demonetization period and property transactions. The Assessing Officer (AO) noted cash deposits of Rs. 14.03 lacs in Bank of Baroda and Rs. 17.39 lacs in Surat District Cooperative Bank Ltd., totaling Rs. 31.42 lacs.
The assessee explained that these deposits originated from prior cash withdrawals from banks for medical purposes. He asserted that he possessed sufficient cash in hand, evidenced by an opening cash balance of Rs. 29,59,546 on April 1, 2016, which increased to Rs. 36,39,139 by November 8, 2016, the day demonetization was announced. He provided a cash book and explained that deposits were made in parts to mitigate the risk of carrying large sums of cash.
