Tribunal allows appeal on demonetized notes addition under section 68, stresses compliance and timely documentation.

The Tribunal allowed the appeal, directing the assessing officer to delete the addition under section 68 related to demonetized notes. The appellant successfully demonstrated that the Specified Bank Notes deposits were from its members before the cessation of liability date as per the Specified Bank Notes (Cessation of liability) Act, 2017. As the main issue was decided in favor of the appellant, the jurisdictional question raised became moot. The Tribunal emphasized compliance with legal provisions and timely documentation for cash deposits to avoid being deemed unexplained money.

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Issues:
1. Addition of Rs.36,16,262 under section 68 of the Act related to demonetized notes.
2. Questioning the jurisdiction of the assessing officer.

Analysis:

Issue 1: Addition under section 68 of the Act related to demonetized notes:
The case involved the appellant challenging the addition of Rs.36,16,262 under section 68 of the Act, concerning the collection of Specified Bank Notes (SBN) during the demonetization period. The assessing officer (AO) contended that the appellant was not permitted to accept demonetized currency during that time, leading to the addition. However, the appellant explained that the SBN deposits were from its members, supported by records. The Tribunal referred to a similar case where such an addition was deleted, emphasizing that the appellant had collected the SBNs before the specified date of cessation of liability as per the Specified Bank Notes (Cessation of liability) Act, 2017. The Tribunal held that the addition under section 68 was not justified, and the AO was directed to delete the disallowance.

Issue 2: Questioning the jurisdiction of the assessing officer:
The appellant also raised a legal ground questioning the jurisdiction of the assessing officer. However, since the Tribunal decided the main issue in favor of the appellant, the legal issue became academic, and there was no need to adjudicate it separately.

In conclusion, the Tribunal allowed the appeal filed by the appellant, setting aside the order of the Ld CIT(A) and directing the AO to delete the impugned disallowance. The judgment highlighted the importance of complying with legal provisions and timelines regarding demonetized currency collections and emphasized the need for thorough documentation and explanation of sources for any cash deposits to avoid being categorized as unexplained money.

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