Tribunal allows appeal on section 68 addition, stresses verification & legal process adherence.

The Tribunal allowed the appeal for statistical purposes, emphasizing the need for thorough verification and adherence to legal procedures in a case involving the addition made under section 68 for cash received during the demonetization period. The assessing officer was directed to verify all details and evidence, considering applicable instructions and granting the assessee a proper opportunity to be heard. The order was pronounced on 09th May, 2023.

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Issues involved:
The only issue in the present appeal is the addition made u/s. 68 for cash received during demonetization period in Specified Bank Notes.

Details of the Judgment:

Issue 1: Addition made u/s. 68 for cash received during demonetization period:
The assessee submitted a list of depositors, KYC documents, cash book, and bank statements to support the claim. The assessee argued that no benefit accrued from the deposit of demonetized currency notes and acted as an intermediary. The authorities did not verify the documents provided. The Ld.DR suggested remanding the case for further verification as per CBDT circulars. The Tribunal noted the cash deposits made by the assessee during demonetization. The authorities rejected the claim, considering the deposits as unexplained cash credit. The Tribunal observed that the cash book and confirmations should have been verified.

The Tribunal examined various standard operating procedures issued by the CBDT related to such cases. Instructions highlighted the need for investigation, enquiry, and evidence collection by the assessing officer. Specific instructions emphasized the comparative analysis of cash deposits and sales, indicators of backdating or fictitious sales, and the burden on the assessee to establish the genuineness of deposits. The Tribunal directed the assessing officer to verify all details and evidence, considering the applicable instructions and granting the assessee a proper opportunity to be heard.

The Tribunal allowed the appeal for statistical purposes, emphasizing the need for thorough verification and adherence to legal procedures. The order was pronounced on 09th May, 2023.

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