Chetana Financial Services Private Limited Vs ACIT (ITAT Bangalore)
ITAT Bangalore remanded the matter back to AO as lower authorities failed to examine the cash deposited during demonetization period as per the CBDT instructions.
Facts- Assessee is a private limited Non-Banking Financial Company (NBFC) engaged in the business of micro finance having head office at Haveri. It provided joint liability group loan with collateral to rural, urban and semi-urban household and mainly concentrates its business in city talukas and remote villages wherein banking facilities are bleak. The assessee filed return of income on 01.11.2017 declaring total income at Rs.43,94,580.
The case was selected for scrutiny and statutory notices issued to the assessee regarding verification of cash deposits during the demonetization period. Assessee being micro finance company has accepted demonetized notes existing series of demonetized notes of Rs.500 & 1,000 upto 08.11.2016 shall cease to be legal tender w.e.f. 09.11.2016. However assessee has accepted Specified Bank Notes (SBNs) from 09.11.2016 to 31.12.2016 of Rs.27,37,957.
AO noted that the assessee was unable to satisfied the ingredients of section 68 of the Income Tax Act. Thus, AO applied section 68 and added into total income and applied tax rate as per section 115BBE of the Act. Accordingly assessed income was determined at Rs.75,49,764.
