TaxTMI 
TaxTMI 
2026 (1) TMI 811
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....after referred to as the "CIT(A)"] erred on facts as also in law in confirming addition of Rs. 29,60,000/-, made on the alleged ground that the assessee failed to explain sources of cash deposited during demonetization period in the bank accounts held in different bank along with necessary supporting evidence. The addition confirmed is unjustified and uncalled for, which deserves to be deleted, may kindly be deleted. 3. Your Honour's assessee craves leave to add, to amend, alter, or withdraw any or more grounds of appeal on or before the hearing of appeal." 3. The relevant material facts, as culled out from the material on record, are as follows. The assessee before us, is an individual and has e-filed his return of income on 22/08/2017, declaring total income of Rs. 5,91,030/-. Thereafter, the assessee`s case was selected for scrutiny through CASS and accordingly, enotice u/s 143(2) of the Act was issued on 17.08.2018, which was duly served upon the assessee. Thereafter, e-notice u/s 142(1) of the Act dated issued on 08.05.2019 in form of detailed questionnaire and was duly served upon the assessee. On verification of the above bank accounts, it was noticed by the ....
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....f fruits during demonetization period is not true. The assessee has cash on hand as on 09.11.2016. This fact was reflected in cash book, submitted to the assessing officer vide submission dated 10.12.2019. The assessee has submitted cash book to the assessing officer and cash balance before demonetization is to be taken from cash book. The cash on hand before demonetization i.e., as on closing of 08.11.2016, is of Rs. 33,95,214. The assessee claimed that during the demonetization period (09.11.2016 to 31.12.2016), the assessee had deposited total of Rs. 83,02,500/- in Punjab National Bank and Rs. 2,50,000/- in Axis Bank. Out of this an amount Rs. 32,10,000/- deposited in SBN in PNB and Rs. 2,50,000/- deposited in SBN in Axis Bank. The assessee has submitted before the assessing officer that entire cash deposited in the bank account, were out of business income and out of past savings of the assessee. 5. However, the assessing officer rejected the above contention of the assessee and observed that on verification of bank statement of the bank account of the assessee, A/c no. 238002100026677 of Punjab National Bank, Junagadh, it was noticed that the assessee has deposited aggregat....
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.... SBN during demonetization period, which is not allowed as per the notification of Govt. of India regarding SBN for sale of fruits. In view of these circumstances the assessing officer noted that the assessee has no proof/documents to prove the cash deposit of SBN notes during demonetization period though the business of the assessee is based on cash sales, and the assessee deposited regularly cash in his account. The assessing officer further noted that from the beginning of demonetization, the assessee has deposited Rs. 5,00,000/- on 10/11/2016 in SBN which the assessing officer considered as his cash on hand before demonetization. The assessing officer further noticed that the assessee has regularly cash deposited in SBN notes during demonetization; due to which it appeared to the assessing officer that the assessee kept selling his fruits in SBN notes during demonetization period, which is not authorized by the notification of Govt. of India during demonetization period. Therefore, in the absence of any documentary evidence, the assessing officer considered that the whole amount i.e. Rs. 29,60,000/- (Rs. 32,10,000+ Rs. 2,50,000 = Rs. 34,60,000 (-) Rs. 5,00,000/-) deposited in a....
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....ts, while he made payment to vendors through banking channel. In such circumstances, it is but natural that the assessee has to deposited cash into bank account for making payment to vendors. This is a routine practice of the assessee which can be seen from cash book submitted before the assessing officer. The Learned Counsel further submitted that a part amount was deposited out of past savings also, therefore addition made by the assessing officer may be deleted. 9. On the other hand, Learned Senior DR for the Revenue, argued that assessing officer during the assessment stage, had already given benefit to the assessee, in respect of opening cash balance, and the balance amount of Rs. 29,60,000, being Specified Bank Notes deposited during the demonetization period by the assessee, was treated by the assessing officer, as unexplained money within the meaning of section 69A of the Act and the same addition should be upheld, in the hands of the assessee. 10. We heard both sides in detail and also perused the records of the case including the paper book filed by the assessee. We note that the cash deposited in the Axis Bank account during demonetization period were out of previo....
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....on date of demonetization must be taken from cash book only and not on assessing officer's wisdom. We note that the Hon'ble Patna High Court in the case of Lakshmi Rice Mills Vs. CIT (1974) 97 ITR 0258 while deciding the identical and similar issue, the Hon'ble court held as under: "While accepting the position that the assessee had on the 12th Jan, 1946, a cash balance duly entered in its books of account a sum of Rs. 1,70,000 odd and accepting the genuineness of the books of account of the assessee, the matter was decided, more or less, on the applicability of the doctrine of onus. The underlying current behind the order of the Tribunal as well as those of the subordinate assessing or appellate authorities seems to be that the assessee must in such cases prove the source of receipt of the high denomination notes. This, is not the correct position in law. It is a fundamental principle governing the taxation of any undisclosed income or secreted profits that the income or the profits as such must find sufficient explanation at the hands of the assessee. If the balance at hand on the relevant date is sufficient to cover the value of the high denomination notes s....