Top Stories Not Every Deposit during Demonetization Period would fall under Category of Unaccounted Cash: ITAT remits to AO for fresh consideration [Read Order] The burden was on the assessee to establish the genuineness of the deposit in order to fall outside the scope of unaccounted cash. By Aiswarya Krishnadas – On May 18, 2024 5:01 pm – 2 mins read The Bangalore bench of the Income Tax Appellate Tribunal ( ITAT ) remitted the case to the Assessing Officer ( AO ) for fresh consideration stating that not every deposit during the demonetization period would fall under the category of unaccounted cash. The assessee, Narayanappa Munikrishnappa had deposited cash in his bank account during the period under consideration.

The onus was upon the assessee to furnish documentary evidence i.e. cash book, ledgers, sale & purchase details, opening & closing stock, cash in hand/debtors for verification of nature & source of cash generation in the hand of the assessee. The assessee was found to be owner of the money but has not offered any acceptable and cogent explanation regarding the source of such money found in its bank account. The Income earned during the year has not been offered and taxes due there upon has not been paid. Hence, genesis of cash in the hand of assessee remained unexplained & transactions hits all three limbs of Section 69A of the Income Tax Act, 1961 as the assessee was found to be owner of the money which was not recorded in the books of account and nature & source of deposit money is not from identifiable source. The NFAC in its order observed that the scheme of Section 69A of the The Bangalore bench of the Income Tax Appellate Tribunalwould show that in cases when the nature and source of acquisition of money, bullion, etc., owned by the assessee is not explained at all, or not satisfactorily explained, then, the value of such investments and money or value of articles not recorded in the books of accounts may be deemed to be the income of such assessee. The provisions of Section 69A of the Income Tax Act treat unexplained money, bullion, etc., as deemed income where the nature and source of investment, acquisition as the case may be, have not been explained or not satisfactorily explained.

Therefore, in these cases, the source not being known, such deemed income covered under the provisions of Section 69A of the Income Tax Act in view of the scheme of those provisions. The two member bench of the tribunal comprising George George K (Vice President) and Chandra Poojari (Accountant member) observed that not every deposit during the demonetization period would fall under the category of unaccounted cash. However, the burden was on the assessee to establish the genuineness of the deposit in order to fall outside the scope of unaccounted cash. The AO shall verify all the details / evidence filed by the assessee based on the above direction and to consider the claim in accordance with law. Further concluded that proper opportunity of being heard must be granted to the assessee. The assessee may be granted physical hearing in order to justify its claim. Accordingly, the issue in dispute is remitted to the file of AO for fresh consideration. Accordingly, the appeal filed by assessee was partly allowed for statistical purposes. To Read the full text of the Order