ITAT Deletes Addition of Cash Deposits on account of agricultural income made During Demonetization

The Income Tax Appellate Tribunal (ITAT), Ahmedabad, deleted an addition made by the assessing officer towards the huge cash deposits made during the demonisation period. The tribunal noted that the assessee had sufficiently explained its source.

The assessee, Ashwinkumar Shankarlal Patel (HUF), filed his income tax return (ITR) declaring Rs 2,17,610 for AY 2017-18. His case was selected for scrutiny based on the large-value cash deposit during the demonetization period. The AO made an addition of Rs 11,60,000 as unexplained cash deposits during the demonetization period under section 69 of the Income Tax. The CIT(A) also upheld this addition, claiming that the assessee failed to explain the cash deposits. Therefore, the assessee approached the ITAT.

The assessee explained that the cash was from agricultural income. To substantiate his claim, he submitted details of agricultural income along with sale bills, bank statements, ledger and cash books.

The tribunal examined the documents and noted that the assessee has been regularly depositing the cash. So, the cash deposits were also made in earlier years, not just during demonetization. Further, the tribunal noted that the assessee had filed the details of the cash deposits to substantiate his claim. Therefore, the addition was deleted.