Hyderabad ITAT Grants Additional Opportunity To Taxpayer To Adduce Nature & Source Of Cash Deposits Made During Demonetization
Finding merits in the argument of assessee regarding substantiation of cash deposit during demonetization, the Hyderabad ITAT directed the AO to give one final opportunity to the assessee to substantiate with evidence to his satisfaction regarding the nature and source of the cash deposit of Rs.9,79,000/- during the demonetization period. The Bench of R.K. Panda (Vice-President)...
Finding merits in the argument of assessee regarding substantiation of cash deposit during demonetization, the Hyderabad ITAT directed the AO to give one final opportunity to the assessee to substantiate with evidence to his satisfaction regarding the nature and source of the cash deposit of Rs.9,79,000/- during the demonetization period.
The Bench of R.K. Panda (Vice-President) observed that “given an opportunity, the assessee is in a position to substantiate with evidence to the satisfaction of the Assessing Officer regarding the month-wise deposit of such cash deposits in the preceding and subsequent years so as to substantiate that the cash so deposited during the demonetization period is in commensurate with the nature of business conducted by the assessee and there is no abnormality in such cash deposits”. (Para 11)
As per the brief facts of the case, the assessee, an individual and Proprietor of M/s. Krishna Provision Store, filed his return admitting an income of Rs.8,30,180/-. The case was selected for scrutiny and AO asked for details of bank accounts held during the year under consideration, source for the deposit during demonetization period etc., Since there was no response from the side of the assessee, the AO proceeded to complete the assessment u/s 144. From the information so furnished by the bank, the Assessing Officer noted that the assessee has made cash deposit of Rs.34,27,250/- during demonetization period out of which an amount of Rs.9,79,000/- was deposited in specified bank note currency. The Assessing Officer, applying the provisions of section 69A r.w.s. 115BBE, made addition of Rs.9,79,000/-.
The Bench found that the assessee in the instant case did not produce any evidence before the Assessing Officer nor replied to the statutory notices for which the Assessing Officer was constrained to pass the order u/s 44AD and thereby made addition u/s 69A r.w.s. 115BBE being the cash deposited during the demonetization period.
The Bench further found that NFAC upheld the action of the Assessing Officer on the ground that the assessee did not produce any document to explain the nature and source of SBN amounting to Rs.9,79,000/-.
“It is the submission of the Counsel for the assessee that the assessee is engaged in the business of provision stores and no books of account are maintained and the income was offered on presumptive tax basis as per provisions of section 44AD of the Act and that the specified bank notes are out of the business receipts on which taxes has already been paid and the addition of the same would amount taxing the same amount twice”, added the Bench.
Hence, the ITAT restored the issue to the file of the Assessing Officer with a direction to give one final opportunity to the assessee to substantiate with evidence to his satisfaction regarding the nature and source of the cash deposit of Rs.9,79,000/- during the demonetization period.
Counsel for Appellant/ Assessee: Mohd. Afzal
Counsel for Respondent/ Revenue: Harshita Chouhan
Case Title: Shri Krishna Murthy Vuppala verses ITO
Case Number: ITA No.187/Hyd/2024