Selective addition u/s. 69B for cash deposited during demonitization period unjustified: ITAT
ITAT Ahmedabad has recently held that selective addition u/s. 69B for cash deposited during demonetization period unjustified.
Let us have a Short Overview of the case:
Case Name: Shri Sanjaykumar Zamatmal Kalwani vs. Income Tax Officer, Patan
Tribunal: Income Tax Appellate Tribunal (ITAT), Ahmedabad SMC Bench
Assessment Year: 2017-18 (ITA No. 64/Ahd/2024)
Decision Date: March 10, 2025
Issue: Addition of ₹11,83,000 under Section 69B (Unexplained Investments)
Background:
The appeal concerns Shri Sanjaykumar Zamatmal Kalwani, a fruit trader, against an order by the Commissioner of Income Tax (Appeals) [CIT(A)] under Section 250 of the Income-tax Act, 1961. The case is for the Assessment Year (AY) 2017-18, regarding an addition of ₹11,83,000 under Section 69B (unexplained investments).
Issue:
The Assessing Officer (AO) made an addition of ₹11,83,000 as the assessee failed to explain the source of cash deposited during the demonetization period. CIT(A) upheld the addition, stating that the assessee did not provide sufficient documentation (such as sale/purchase bills) to prove the legitimacy of the deposits.
Assessee’s Arguments:
The total sales of ₹1.58 crore and corresponding deposits were accepted except for ₹11.83 lakh during demonetization. Cash transactions were part of regular business. Financial statements and audit reports supported the legitimacy of deposits. Similar legal precedents were cited to support the case.
Tribunal’s Decision:
The tribunal observed that the overall business transactions were ₹1.58 crore, and the CIT(A) selectively questioned deposits only during the demonetization period. Since the nature of the business (fruit trading) involves cash transactions, expecting corporate-like documentation was unreasonable. The appeal was allowed, and the addition of ₹11.83 lakh was deleted.
The Copy Of the order is as under:
