Gujarat High Court quashed reopening of assessment on the allegation of cash deposit in Bank account post demonetisation
Gujarat High Court vide it’s order dated 10th Sept.2018 in the case of SWATI MALOVE DIVETIA VERSUS INCOME TAX OFFICER WARD7 (1) (2) has quashed reopening of assessment on the allegation of case deposit in bank account post demonetisation.
The court observed that it is testing the reasons on the basis of material which was available with AO. In pre-notice queries, the Assessing Officer had asked the assessee to explain the source of the cash deposits post demonetization. The assessee disclosed such source being her own bank accounts and their withdrawals matching quite closely to the deposits which withdrawals were made within the close proximity of the deposits. If the Assessing Officer had any reason to discard such disclosures and still form a belief that the deposits were from the sources not indicated by the assessee, nothing of the sort has come in the form of reasons recorded. The reasons recorded completely ignored the Assessing Officer’s query and the response made by the assessee to such queries. Assessing Officer in the reasons recorded has simply kept aside the assessee’s explanation for the availability of cash on hand for deposit post demonetization. The reasons thus clearly lacked validity and proceeded on erroneous premise. Impugned notice is therefore quashed. Petition is allowed in favour of assessee.
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