Case Law Details
Sunil Khaitan Vs DCIT (ITAT Kolkata)
The case of Sunil Khaitan vs. DCIT (ITAT Kolkata) revolves around the taxation of cash deposits made during the demonetization period. Sunil Khaitan, the appellant, filed his income tax return for the assessment year 2017-18, declaring a total income of Rs. 40,48,000/-. However, his case was selected for scrutiny under the Computer Aided Scrutiny Selection (CASS) for verification of cash deposits during the year, particularly those made during the demonetization period.
The Assessing Officer (AO) observed that Sunil Khaitan had deposited Rs. 34,18,000/- in Specified Bank Notes (SBNs) during the demonetization period. Khaitan explained that these cash deposits were sourced from cash withdrawals from banks and unsecured loans from different parties, as well as his salary income. However, the AO was not convinced by this explanation and added the alleged cash deposits to Khaitan’s income, assessing it at Rs. 74,66,000/-.
Khaitan appealed this decision to the Commissioner of Income-tax Appeals (CIT(A)), but his claims were not adequately considered. Dissatisfied with the outcome, Khaitan then appealed to the Income Tax Appellate Tribunal (ITAT) Kolkata, raising multiple grounds of appeal, with the main grievance being against the addition of Rs. 34,18,000/- under Section 68 of the Income Tax Act.
During the hearing, Khaitan’s representative reiterated that all relevant details regarding the source of funds were submitted before the CIT(A). It was highlighted that Khaitan had a sufficient cash balance before and during the demonetization period, which was evident from his cash book and other financial statements. Specifically, it was shown that Khaitan had a cash balance of Rs. 38,81,508/- available for deposit in the bank account, out of which only Rs. 31,68,000/- was deposited during the demonetization period.
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