Appeal Successful: Unexplained Cash Deposit During Demonetization Period Explained, Rs. 10 Lakh Addition Deleted.

The appeal against the order of Ld. NFAC/CIT(A), Delhi, concerning an unexplained cash deposit during the demonetization period, was allowed. The initial decision confirmed Rs. 10 lakh as unexplained cash deposit due to insufficient reconciliation documents. However, upon hearing both parties, the court acknowledged the appellant's business nature and monthly sales, leading to the deletion of the Rs. 10 lakh addition. Consequently, the appeal was allowed, and the unexplained cash deposit was deemed explained.

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Issues Involved:
The appeal against the order of Ld. NFAC/CIT(A), Delhi dated 13.02.2023 regarding unexplained cash deposit during demonetization period.

Details of the Judgment:

Issue 1: Unexplained Cash Deposit
The appellant had deposited cash of Rs. 48,80,000/- in the bank account during demonetization. The ld. CIT(A) confirmed Rs. 10 lakh as unexplained cash deposit based on monthly cash sales not commensurate with the deposited amount. The appellant failed to provide necessary reconciliation documents to substantiate its claim, leading to an estimated unexplained cash deposit of Rs. 10,00,000/-. The appellant received a relief of Rs. 9,78,514/-.

Issue 2: Appeal Hearing
Both parties' arguments were heard, and the Revenue acknowledged the cash deposit during demonetization. The appellant, engaged in the sale of bikes in cash, had a portion of the unexplained cash treated as explained by the Revenue. Considering the business nature, monthly sales, and circumstances, the addition of Rs. 10 lakhs as unexplained was deleted, resulting in the appeal being allowed.

Conclusion:
The appeal was allowed, and the addition of Rs. 10 lakhs as unexplained cash deposit during demonetization was deleted based on the business operations and circumstances presented during the hearing.

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