Rahul Cold Storage Vs ITO (ITAT Raipur)
The appeal before the Income Tax Appellate Tribunal (ITAT), Raipur, arose from the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, dated 12.05.2022, which upheld an addition of ₹46,55,000 made by the Assessing Officer under Section 68 of the Income Tax Act for Assessment Year 2017–18. The addition related to cash deposits made during the demonetization period, which were treated as unexplained cash credits.
The assessee, a firm engaged in the business of running a cold storage, had deposited ₹46.55 lakh in demonetized currency notes in its bank accounts during November 2016. The assessee explained that these deposits were made from cash in hand derived from its business receipts, specifically cold storage rental income. In support of this claim, the assessee submitted its cash book, bank statements, and details of monthly rental receipts.
The Assessing Officer, however, rejected the explanation on the grounds that the assessee failed to furnish sufficient supporting documents such as bills, vouchers, and registers to substantiate the source of the deposits. Additionally, the Assessing Officer observed that the cash deposits during the demonetization period were significantly higher compared to deposits made before and after the period, as well as in the preceding year. Based on these factors, the entire amount was treated as unexplained cash credit under Section 68.
