Case Law Details
DCIT Vs Sushil Kumar Sharma (ITAT Delhi)
Merely because certain cash was deposited in the specified bank notes by the assessee during the demonetization period will not make the assessee tainted party when the very same transaction are being made by the assessee in the part as well as in the future.
In a significant ruling, the Income Tax Appellate Tribunal (ITAT) Delhi has deleted additions for unexplained cash deposits in the case of DCIT vs. Sushil Kumar Sharma. This judgment highlights the importance of substantiating transactions with proper evidence, especially during critical periods like demonetization. The case revolved around cash deposits made by the assessee during the demonetization period, which the Assessing Officer (AO) initially treated as unexplained income. However, the ITAT Delhi’s decision to delete these additions underscores the tribunal’s reliance on thorough evidence and proper documentation.
Case Background
The case involved cross appeals for the Assessment Year (AY) 2017-18 against the order of the National Faceless Appeal Centre (NFAC), which partially upheld the additions made by the Assessing Officer (AO). Sushil Kumar Sharma, the assessee, was engaged in the business of providing security, housekeeping, and manpower supply under the name Vandana Enterprises. During the financial year 2016-17, he operated as a business correspondent for First Rand Bank (FRB), a scheduled commercial bank. His responsibilities included collecting loan installments from numerous microfinance borrowers and depositing the collected amounts in his bank account before transferring them to FRB’s account.
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