TaxTMI 
TaxTMI 
2026 (8) TMI 371
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....e-assessment order 22/08/2021 passed u/s. 147 for A.Y 2017-18 (Financial Year 2016-17) by National Faceless Assessment Centre is illegal, perverse and without jurisdiction. 3. That without prejudice to the above, on the facts and in the circumstances of the case and as also, in law, the learned AO & Ld. NFAC (A) grossly erred in ignoring the Press Release dated 18.11.2016 issued by CBDT and subsequently, Instruction No. 03/2017 [F. No. 225/100/2017/ITA-II] dated 21.02.2017 issued by CBDT for dealing with case during demonetization. 4. That, on the facts and in the circumstances of the case, re-determination of total income u/s. 147 r.w.s. 144B of the Income-Tax Act, at Rs. 31,58,820/- as against the Returned Income of Rs. 3,51,320/, thereby making an addition of Rs. 28,07,500/- in the appellant's total income is quite unjustified, unwarranted, excessive, arbitrary and bad-in- law. 5. That the Ld. NFAC (A) has erred in law and/or on facts in sustaining the addition of Rs. 23,07,500 out of total addition of Rs. 28,07,500/- as unexplained cash u/s. 69A r.w.s 115BBE of the Act on account of following :- 5.1 Because the impugned addition sustained by ....
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....evant invoices that source of cash deposited was out of the cash sales made during the A.Y. relevant to the assessment year under consideration. 6. That on the facts & circumstances of the case, Ld. NFAC (A) has grossly erred in law in sustaining the addition of Rs. 23,07,500 out of total addition of Rs. 28,07,500/- u/s. 69A of the Act chargeable to tax u/s. 115BBE of the Act since provisions of amended section 115BBE of the Act are attracted w.e.f. A.Y. 2018-19 and are not applicable to A.Y. 2017-18. 7. The appellant craves leave of Your Honour to add to, alter amend and/or delete all' or any of the foregoing grounds of appeal." 2. The background facts leading to present appeal are as under: (i) The assessee-individual filed his return of income of AY 2017-18 u/s. 139 declaring a total income of Rs. 3,51,320/- which was assessed. Subsequently, the AO re-opened assessee's case u/s. 147 through notice dated 30.12.2019 u/s. 148 to examine the issue of cash deposited in bank a/cs during demonetization. The assessee made cash deposits of Rs. 28,07,500/- in three banks, viz. (i) State Bank of India, (ii) Central Bank of India, and (iii) Bank of Baroda. In r....
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....ree banks u/s. 133(6) for providing details of "demonetized currency notes" deposited by assessee. However, in response to AO's letter, one of the banks, viz. Central Bank of India only responded, the assessee has filed reply- letter sent by Central Bank of India at Page 125 in Paper-Book. Ultimately, the CIT(A) passed impugned order granting an adhoc relief of Rs. 5,00,000/- and upholding the remaining addition of Rs. 23,07,500/ -. (iii) Still aggrieved, the assessee has come in next appeal before us. 3. In Grounds of Appeal, as re-produced in earlier Para No. 1, the assessee has raised as many as 7 grounds (with sub-grounds in some of the grounds). In these grounds, the assessee has raised the issue of illegality of assessment-order passed by AO as well as the merit of the impugned addition u/s. 68. However, during hearing before us, Ld. AR for assessee made a categorical assertion that the assessee is not pressing the issue of illegality of assessment, the assessee wants limited adjudication of the merit of addition. Ld. DR for revenue is not opposing this submission of Ld. AR. Therefore, taking into account the assertion made by Ld. AR, we reject the grounds raised ....
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....2016-17 relevant to A. Y. 2017-18 is treated as unexplained cash credit u/s. 68 of the I.T. Act, 1961 in the hands of the assessee for the AY 2017-18 and the same is taxed as per the provisions of section 115BBE of the I.T. Act, 1961." [emphasis supplied] 6. Now, we re-produce the relevant portion of impugned order passed by CIT(A): "1. Decision :- 7.1 The appellant is a proprietor of grocery stores and declared total income of Rs. 3,51,320/ -. The appellant had deposited cash of Rs. 28,07,500/- during demonetization period in SBNs in SBI, Central Bank of India and Bank of Baroda Bank accounts. As the appellant did not offer satisfactory explanation towards the source of cash deposit, the AO treated the entire cash deposit of Rs. 28,07,500/- as unexplained cash credit and brought to tax u/s. 68 of the Act. Aggrieved by the said addition, the appellant is in appeal and has raised 3 grounds, which are adjudicated as under: 8. Ground No. 1 & 2 are relating to addition of Rs. 28,07,500/- u/s. 68 of the Act. The facts of the case are that the appellant is a proprietor of grocery stores and declared total income of Rs. 3,51,320/ -. The appellant had....
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....E (M.P.) ITA No. 382/IND/2025 (A.Y. 2017-18) FIXED ON 05/01/2026 APPELLANT: - SHRI VIRENDRA KUMAR MANDOT VERSUS RESPONDENT :- NATIONAL FACELESS ASSESSMENT CENTRE, NEW DELHI SYNOPSIS May it please your honour 1. That the present appeal is filed against the addition of Rs. 23,07,500/- sustained by the Ld. NFAC, New Delhi. 2. That the Appellant is engaged in retail and wholesale trading of grocery items such as sugar, edible oils, and kirana goods, and is a regular income-tax assessee. The return of income for A.Y. 2017-18 was filed on 27.10.2018 declaring total income of Rs. 3,51,320/, which was duly processed and accepted. 3. Thereafter the assessment of the Appellant was reopened by the Ld. Assessing Officer under Section 147 read with Section 143(3) of the Act on the allegation that cash was deposited during the demonetization period and the return of income was not filed within the prescribed time for A. Y. 2017-18. 4. That vide Re-assessment order dated 22.08.2021, the Ld. AO made an addition of Rs. 28,07,500/- on account of cash deposits during the financial year. In appeal, the L....
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.... 4,92,168 1,08,612 6,00,780 2,60,000/- Central Bank (650) 15/12/2016 4,70,676 2,14,750 6,85,426 4,09,500/- Central Bank (650) 16/12/2016 2,75,926 1,21,870 3,97,796 1,45,000/- Central Bank (650) 19/12/2016 4,06,806 1,08,790 5,15,596 1,00,000/- BOI (002) 26/12/2016 7,77,485 57,633 8,35,118 2,80,000/- BOI (002) Total 28,07,500 7. It is also relevant to re-produced details of Total Cash deposited during the year:-- Month Total Cash deposited April 18,70,000 May 18,59,000 June 34,44,500 July 30,96,000 August 29,74,000 September 14,40,000/- October 27,35,000/- November 19,43,000/- December 21,34,500/- January 7,10,000/- February 19,48,000/- March 27,85,000/- 8. That the Appellant is maintaining regular and audited books of account, including the cash book, purchase ledger, Sale ledger, bank book. That the cash deposits during the financial year were duly recorded therein. 9. The cash deposited in the bank accounts was out of genuine sales proceeds ....
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....portion of the deposits consisted of invalid or demonetized notes. Even if a negligible amount were alleged to be in old currency, Sections 68 and 69 would still not apply, as all transactions were genuine, duly recorded in the books of account, and formed part of the regular business turnover. Accordingly, the addition sustained by NFAC is arbitrary, illegal, and wholly unsustainable in law. (Page No. 125 of the Paper Book contains the letter issued by the Central Bank of India in compliance with the notice issued by the AO u/s. 133(6), which clearly shows that the total amount deposited during demonetization was Rs. 9,56,500/-, out of which only Rs. 53,500/- was in old currency notes. This letter was forwarded by the AO along with the remand report.) That a similar notice u/s. 133(6) was issued by the AO to other banks, namely SBI and Bank of India; however, no response was received from these banks. Thus, the Appellant submits that the deposits mainly comprised valid running currency from regular business sales, and only a negligible portion, if any, was old currency. In Tamil Nadu State Marketing Corporation Ltd. v. ACIT (ITA No. 431/CHNY/2023, order ....
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....essee filed certain details/documents to AO but those documents, as mentioned by AO, were not complete documents to substantiate the sources of deposits made in bank a/cs. Therefore, the AO treated the deposits in bank a/c as unexplained cash credit u/s. 68 and made addition with this conclusion: "In process of finalisation of assessment proceedings, the assessee was asked to furnish the explanation of the sources of said cash deposits along with collaborative supporting document. The assessee failed to furnish the complete details ...... In absence of any concrete evidence and details of sources of cash deposits with supporting documents, the sources of cash deposits to the tune of Rs. 28,07,500/- remained unexplained." The Ld. DR for revenue has placed a very strong reliance on this conclusion made by AO and contended that there was a failure on the part of assessee to substantiate the sources of deposits. He contented very forcefully that when the precise reason of taking assessee's case under the proceeding of section 147 was to examine the cash deposits made by assessee in bank a/cs during demonetization period, the assessee had a strong obligation to explain the sources of de....