Tatyasaheb Narayan Lagad Vs ITO (ITAT Pune)
The case of Tatyasaheb Narayan Lagad vs. ITO before the ITAT Pune revolves around the assessment of cash deposits made during the demonetization period in 2016. The assessee, a partner in a firm with income from various sources including rent and partnership share, filed his income tax return for AY 2017-18 declaring ₹8.07 lakh. His case was flagged for limited scrutiny due to a ₹21.4 lakh cash deposit in old currency on 21.11.2016. The Assessing Officer (AO) questioned the source of these funds, and despite the assessee’s submission that the money came from cash on hand, the AO found discrepancies between the income tax returns and cash books. Specifically, cash balances were either left blank or recorded only in books submitted later. As a result, the AO treated the deposit as unexplained under Section 69A of the Income Tax Act and added it to the taxable income under Section 115BBE.
The CIT(A)/NFAC upheld the AO’s decision, citing inconsistencies in the revised returns and lack of documentary evidence supporting the source of the cash. The appellate authority noted that although the assessee submitted a cash book reflecting sufficient opening balances over previous years, those figures were not consistently reported in the filed ITRs. Furthermore, the appellant could not demonstrate that the money was withdrawn from bank accounts and held as cash. As such, the appellate authority deemed the explanation unsatisfactory, confirming the addition of ₹21.4 lakh as unexplained income under Section 69A.
