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Assessee gets partial relief on unexplained cash deposits under Section 69A, pre-demonetisation deposits excluded from scrutiny scope ITAT Visakhapatnam allowed partial relief to assessee regarding unexplained cash deposits under section 69A. While assessee's case was selected for ...
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Assessee gets partial relief on unexplained cash deposits under Section 69A, pre-demonetisation deposits excluded from scrutiny scope
ITAT Visakhapatnam allowed partial relief to assessee regarding unexplained cash deposits under section 69A. While assessee's case was selected for limited scrutiny under CASS to examine deposits during demonetisation period, deposits made before demonetisation were improperly included in addition. ITAT granted relief of Rs. 5,00,000 for pre-demonetisation deposits as they were beyond scrutiny scope, and additional relief of Rs. 2,50,000 following CBDT Instruction No.03/2017. However, remaining addition of Rs. 3,30,000 for demonetisation period deposits was upheld as assessee failed to establish identity, genuineness and creditworthiness of transactions despite claiming gifts from parents.
Issues involved: The appeal against the order of Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC), Delhi under section 143(3) of the Income Tax Act, 1961 for the Assessment Year 2017-18.
Details of the Judgment:
1. The assessee, deriving income from saree designing, filed her return of income for A.Y. 2017-18, admitting total income at Rs. 3,54,500. The case was selected for limited scrutiny under CASS to examine cash deposits during demonetization. The Assessing Officer (AO) observed cash deposits of Rs. 10,80,000 from 05.11.2016 to 17.12.2016. The assessee failed to provide documentary evidence for the cash deposits, leading the AO to treat the entire amount as undisclosed income under section 69A of the Act.
2. The CIT(A) granted partial relief of Rs. 2,50,000 but confirmed the remaining addition of Rs. 8,30,000. The assessee appealed to the Tribunal, challenging the addition and raising concerns about the consideration of deposits made before demonetization.
3. The Tribunal considered the contentions and relevant evidence. The assessee claimed the cash deposits were from gifts received and withdrawals made before demonetization. The Tribunal noted that deposits made before demonetization were beyond the limited scrutiny scope. Relying on CBDT Instruction No.03/2017, the Tribunal granted further relief of Rs. 5,00,000 for pre-demonetization deposits and upheld the remaining addition of Rs. 3,30,000 due to failure in establishing the transactions' identity, genuineness, and creditworthiness.
4. The Tribunal partly allowed the appeal, providing relief for the pre-demonetization deposits and upholding the addition for the demonetization period. The order was pronounced on 11th January 2024.
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