Umamaheswari Vs ITO (ITAT Chennai)
The case before the Income Tax Appellate Tribunal (ITAT), Chennai, concerned an appeal filed by the assessee against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, dated 06.06.2022 for Assessment Year 2017–18. The dispute arose from an addition of ₹7,67,500 made by the Assessing Officer under Section 69A of the Income Tax Act, treating certain cash deposits during the demonetization period as unexplained money.
The assessee had filed her return of income declaring total income of ₹4,37,090 and agricultural income of ₹7,83,000. The case was selected for limited scrutiny to verify cash deposits made during the demonetization period. Information obtained from banks revealed that the assessee had deposited ₹17,25,500 in specified bank notes (₹500 and ₹1,000 denominations). Upon being asked to explain the source, the assessee submitted a cash book showing a balance of ₹9,58,066 as on 08.11.2016 and explained that the remaining deposits were sourced from ₹13 lakh received on 09.11.2016 as sale consideration for a property.
The Assessing Officer accepted the source of ₹9,58,066 but rejected the explanation for the remaining ₹7,67,500. The rejection was based on the reasoning that after 08.11.2016, specified bank notes had ceased to be legal tender and therefore could not be accepted as valid consideration. Accordingly, the amount was treated as unexplained and added under Section 69A. The Commissioner (Appeals) upheld this addition without granting relief.
