Every deposit during demonetization cannot be categorized as unaccounted cash

Yagnavalkya Souhardha Credit Co. Ltd. Vs ITO (ITAT Bangalore)

ITAT Bangalore held that addition under section 68 with regard to deposit of Specified Bank Notes [SBN’s] it was clarified that every deposit during demonetization doesn’t fall under category of unaccounted cash. However, burden is on the assessee to establish the genuineness of the deposit.

Facts-

The assessee is a cooperative credit society engaged in providing credit facilities to its members. AO noted that the assessee had deposited Specified Bank Notes [SBN’s] received from its members during the period of demonetization into its bank account no.220 amounting to Rs.38,82,000/- and in bank account no.20589 amounting to Rs.54,58,000/- with Shri. M. Vishvesvaraya Co-operative Bank Ltd, Shankarmutt Road Bangalore. In course of the assessment proceedings, the assessee explained that its members had deposited the SBN’s with the assessee and in turn, the assessee had deposited the said SBN’s in the Bank.

AO after considering the submissions made the said addition of Rs.93,40,500/- u/s 68 rws 115BBE of the Act on the ground that the assessee ought not to have accepted SBN’s, which are banned and cannot be considered as legal tenders. Aggrieved, the assessee challenged the assessment order before the CIT, who confirmed the order of the Ld.AO. Aggrieved by the order of the CIT(A), the assessee is before us.

Please become a Premium member. If you are already a Premium member, login here to access the full content.