Whether addition u/s 69A for cash deposited in demonetization is justified if it is part of turnover?
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Short note of today's case law for quick reference:
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[2024] 115 ITR (Trib) (S.N. 13) Kolkata – Patna
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Shyam Kumar Gara
v.
Income Tax Officer
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Rajpal Yadav (Vice President) and Dr. Manish Board (AM)
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September 3, 2024
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1) For A.Y 2017-18, the assessee involved in the retail business of Shoes, did not file his return.
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2) Pursuant to receipt of information from the annual information about cash deposits made in the bank during the demonetisation period, the A.O recorded reasons and issued notice u/s 148 of the Income Tax Act, 1961.
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3) A.O. assessed the assessee’s income u/s 44AD determining the taxable income at 8% of the alleged gross receipts or turnover.
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4) The sum deposited during demonetisation period was treated separately as unexplained money u/s 69A along with undisclosed interest income thereon.
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5) The CIT(A) without recording any finding, concurred with the A.O.
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6) On further appeal tribunal held:
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? Assessee’s total cash deposit made during the year was Rs. 81,24,000/-out of which only a small portion was deposited during the demonetisation period.
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? If the balance of the amount could become part of the gross turnover, a separate treatment could not be given to the normal deposit of money during the demonetisation period.
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? Thus, sum deposited during demonetisation period could not be assessed u/s 69A, but to be constructed as part of the gross turnover.
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? The A.O. to take only 8% of alleged gross turnover, separate addition and treatment of balance to be deleted.
Founder Partner | Diploma in Systems Audit DISA (ICAI)
2 个月Sir, judgments like these illuminate the need for tax assessments to balance enforcement with logic, ensuring no room for discord in justice. Financial clarity outshines legal ambiguity. When the heart of turnover beats steady, no shadow of doubt can veil its light. Much like finding symmetry in a mosaic, tax laws must reflect fairness in complexity. This ruling exemplifies how judicious interpretation can transform routine assessments into landmarks of clarity.