Amount Deposited During Demonetization Does Not Call For Addition U/s 69A If Source Of Deposit Was Sufficiently Explained: Rajkot ITAT
Pankaj Bajpai
6 May 2024 11:45 AM GMT
Finding that the assessee has explained the details of the earning of the amount which was rightly deposited during the demonetization period, the Rajkot ITAT held that the addition confirmed by the CIT(A) u/s 69A of the Income tax Act is not justified. Section 69A lays down that if, in any financial year, the assessee is found to be the owner of any money, bullion, jewellery, or...
Finding that the assessee has explained the details of the earning of the amount which was rightly deposited during the demonetization period, the Rajkot ITAT held that the addition confirmed by the CIT(A) u/s 69A of the Income tax Act is not justified.
Section 69A lays down that if, in any financial year, the assessee is found to be the owner of any money, bullion, jewellery, or another valuable article, and such money, etc., is not recorded in the books of account, if any, maintained by him for any source of income, and the assessee offers no explanation about the nature and source of acquisition of the said money, etc., or the explanation offered by him is not satisfactory in the opinion of the Assessing Officer, the money may be deemed to be the income of the assessee for the financial year.
The Bench of Suchitra Kamble (Judicial Member) and Waseem Ahmed (Accountant Member) observed that “The assessee has also given the land revenue record as well as the bank statement including professional accounts for earning agricultural income which was not at all considered by the CIT(A) while confirming the addition to the extent of Rs. 10,00,000”. (Para 7)
As per the brief facts of the case, the assessee, an agriculturist had deposited Rs. 10,00,000/- in cash in his bank account during the demonetization period. Since no return was filed by the assessee, assessment was completed u/s. 144 thereby making addition of Rs. 10,07,500/- as unexplained money u/s. 69A of the Act.
The Bench noted that the assessee is having a major source of income from agricultural operation as well as income on sale of milk.
Being the agriculturist, he is not maintaining regular books but provisional accounts were maintained and the same was submitted before the CIT(A), added the Bench.
The Bench observed that the finding of the CIT(A) that the assessee deposited a wholesome of Rs. 10,00,000/- in the bank account on 11-11-2016 in cash is not fully explained appears to be not justified as the assessee in his submissions before the CIT(A) has categorically mentioned the bills for sale of crops and also has given the details of the crops such as groundnut, cotton and cultivating vegetables.
Hence, the ITAT allowed the assessee's appeal.
Counsel for Appellant/ Assessee: None
Counsel for Respondent/ Revenue: K.L. Solanki
Case Title: Satishbhai Kadvabhai Sarvaiya verses ITO
Case Number: ITA No. 268/Rjt/2022
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