Suman Poptani Vs ITO (ITAT Raipur)
The appeal arose from the order of the CIT(A)/NFAC dated 18.02.2026 for Assessment Year 2017-18. The assessee challenged an assessment framed under Section 143(3) of the Income-tax Act, 1961, in which an addition of ₹12,00,000 was made under Section 69 in respect of cash deposited during the demonetisation period.
During the assessment proceedings, the assessee submitted computation of income, capital accounts for the relevant and preceding years, and stated that income was earned from boutique activities and interest on petty advances given to tailors, employees and related persons. It was explained that the boutique activity consisted mainly of designing and stitching work, while interest income of ₹90,800 was received from small lending without any fixed rate of interest.
To verify these claims, the Assessing Officer deputed an Inspector to conduct field enquiries. The Inspector reported that enquiries made at the business and residential addresses indicated that the assessee was a housewife and no boutique or other business activity was being carried on. The Inspector also found no evidence of any business establishment or commercial activity at the premises.
The CIT(A)/NFAC observed that the case had been selected for limited scrutiny to verify cash deposits during the demonetisation period and that the assessee had deposited ₹12,00,000 on 11.11.2016. According to the appellate authority, although the assessee claimed that the cash represented accumulated capital from boutique work and petty lending, no documentary evidence such as bills, vouchers, customer confirmations, details of advances, borrower confirmations, repayment details or evidence of stitching charges was produced. The Assessing Officer accepted the disclosed interest income from Rajesh Traders and Vijaya Traders but held that the alleged accumulated capital lacked a credible source. The CIT(A) concluded that the assessee failed to satisfactorily explain the source of the cash deposit, upheld the invocation of Section 69 and confirmed the addition of ₹12,00,000.
