Palak Rajesh Kumar Dudhiya Vs ITO (ITAT Ahmedabad)
In a notable verdict, the Income Tax Appellate Tribunal (ITAT) Ahmedabad Bench has overturned an addition of Rs. 15 lakh made by the tax authorities against Palak Rajesh Kumar Dudhiya. The case pertained to cash deposits made during the demonetization period in Assessment Year 2017-18. The ITAT ruled in favor of the assessee, finding that a clear trail of cash flow had been established, adequately explaining the source of the deposits.
The individual assessee, who reported interest income, had her case selected for “limited scrutiny” due to cash deposits made during the demonetization period. The Assessing Officer (AO) observed cash deposits totaling Rs. 15 lakh in the assessee’s Indian Overseas Bank account, made on November 16, 2016 (Rs. 15 lakh) and November 18, 2016 (Rs. 3 lakh – note: the order text seems to indicate both 15L and 3L, but the final addition is 15L). In response to a show cause notice, the assessee submitted written explanations, bank statements, and a cash book for November 2016, asserting that the deposits originated from prior cash withdrawals from her account with Kalupur Co-operative Bank.
However, the AO was not satisfied, noting that a complete cash book for the entire year and comprehensive bank statements were not furnished. Consequently, the AO treated the Rs. 15 lakh as unexplained money and made an addition under Section 69A read with Section 115BBE of the Income Tax Act. The CIT(A) subsequently upheld this addition, leading the assessee to appeal before the ITAT.
