B.K. Rajanna Vs ITO (ITAT Bangalore)
In B.K. Rajanna vs. ITO, the Bangalore ITAT addressed a dispute over cash deposits made during the demonetization period. The taxpayer, a bar and restaurant owner, deposited ₹44.83 lakh in cash, including ₹24.44 lakh in Specified Bank Notes (SBNs). The Assessing Officer (AO) held that the taxpayer was not authorized to accept SBNs after November 8, 2016, and added ₹9.50 lakh as unexplained cash under Section 68 of the Income-tax Act, subjecting it to a higher tax rate under Section 115BBE. The CIT(A) upheld this assessment, rejecting the taxpayer’s claim that the cash deposits were from legitimate business sales.
The ITAT ruled that the key issue was whether the deposited cash was generated from disclosed business sales. It noted that if the taxpayer could establish a direct link between sales revenue and the cash deposits, no additional tax should apply. The tribunal cited a Supreme Court ruling that emphasized evaluating evidence in such cases. Consequently, the matter was remanded to the AO for fresh adjudication, allowing the taxpayer to provide further evidence linking deposits to recorded business income. The appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
This appeal is filed by Shri B.K. Rajanna (the assessee/appellant) for the assessment year 2017-18 against the appellate order passed by the CIT(Appeals)-7, Kolkata [ld. CIT(A)] dated 24.01.2024 wherein the appeal filed by the assessee against the assessment order dated 09.12.2016 passed u/s. 143(3) of the Income-tax Act, 1961 (the Act) by the ITO, Ward 2(2)(2), Bangalore was dismissed. Therefore assessee is aggrieved with the appellate order and is in appeal before us.
