Hasmukh Ramanlal Patel Vs ITO (ITAT Ahmedabad)
Old Cash Story Rejected Again: ITAT Upholds ₹15.26 Lakh Demonetisation Deposit Addition
ITAT Ahmedabad “SMC” Bench, in Hasmukh Ramanlal Patel vs ITO (ITA No.745/Ahd/2025, AY 2017-18; order dated 24.12.2025), has dismissed the assessee’s appeal and confirmed addition of ₹15.26 lakh as unexplained cash deposits made during the demonetisation period.
The assessee had deposited ₹15.26 lakh in November 2016 and claimed that the amount represented old cash withdrawn in March 2016 (₹7 lakh on 22.03.2016 and ₹8.16 lakh on 29.03.2016) out of a bank loan of ₹20 lakh sanctioned for cold storage purposes. According to the assessee, the cash was kept at home and later re-deposited during demonetisation.
Both CIT(A) and ITAT found the explanation unsupported by any documentary evidence. The Tribunal noted that the loan was granted for a specific purpose, indicating immediate utilisation, and the assessee failed to explain why such a large sum was retained in cash for months. In absence of any cash-flow statement, utilisation details, or corroborative evidence, the plea of old cash was held to be implausible.
Holding that mere assertion of past withdrawals does not establish availability of cash-in-hand, especially during demonetisation scrutiny, ITAT found no infirmity in the orders of the lower authorities and upheld the addition in full. The appeal was accordingly dismissed.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
