ITAT Remands Rs 3.33 Crore Demonetisation Cash Deposit Case to AO, Directs Rs 10,000 Relief Fund Payment:

The Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, has restored the case of Bhavin Amratlal Shah to the Assessing Officer (AO) for fresh examination of a Rs 3.33 crore cash deposit addition made during the demonetisation period. The Tribunal directed the assessee to deposit Rs 10,000 in the Prime Minister’s National Relief Fund within 60 days of receiving the order, considering his failure to properly present his case before the lower authorities.

The assessee had filed his income tax return for Assessment Year 2017-18, declaring total income of Rs 4.90 lakh. During assessment proceedings, the AO noticed cash deposits totalling Rs 3.33 crore in three bank accounts during the demonetisation period. Despite receiving several notices under Section 142(1) of the Income Tax Act, the assessee failed to provide satisfactory explanations or supporting documents regarding the source of the deposits. Consequently, the AO treated the amount as unexplained money under Section 69A and applied Section 115BBE.

Before the Tribunal, the assessee disputed ownership of two bank accounts and claimed that the cash deposits in his State Bank of India (SBI) account came from cash sales. The Tribunal observed that these claims required proper verification of bank account ownership, Know Your Customer (KYC) records, books of account, sales registers and other supporting documents.

The Tribunal held that “the issue requires proper verification of the relevant bank accounts, KYC records, books of account, Sales Register and other supporting evidences. Since the assessee did not effectively substantiate these claims before the lower authorities, in the interest of justice, we deem it appropriate to restore the issue to the file of the Assessing Officer for fresh adjudication.”

Accordingly, the ITAT set aside the CIT(A)'s order and remanded the matter to the AO for fresh adjudication, subject to payment of the prescribed cost. The AO was directed to examine the ownership of the bank accounts and verify the nature and source of the deposits in accordance with law, after providing the assessee a reasonable opportunity to present his case. The appeal was allowed for statistical purposes.