ITO Vs Hema Arora (ITAT Delhi)
Section 69A Addition on Demonetisation Cash Deposits Deleted in Presumptive Taxation Case under Section 44AD: ITAT Delhi
In ITO vs Hema Arora (AY 2017-18), the ITAT Delhi dismissed the Revenue’s appeal and upheld deletion of ₹79.85 lakh addition made u/s 69A relating to demonetisation cash deposits. The assessee, a small textile trader, declared income on presumptive basis u/s 44AD and explained that deposits were from Diwali-season cash sales and past savings. The Tribunal observed that turnover declared (₹1.02 crore) was higher than the deposits and supporting details like purchase/sales summaries and cash flow statements were furnished.
ITAT agreed with CIT(A) that where income is declared u/s 44AD and books are not required to be maintained, invoking sec 69A becomes inappropriate once sales are accepted. The AO failed to bring corroborative evidence to disprove cash sales or reject turnover. Consequently, the addition was held unsustainable and Revenue’s appeal was dismissed.
FULL TEXT OF THE ORDER OF ITAT DELHI
1. This appeal is filed by the Revenue against the order of Ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to ‘ld. CIT(A)’) dated 31.07.2025 for AY 2017-18.
2. At the time of filing of appeal, the Registry has pointed out a defect that appeal is time barred by 6 days.
