NEELAM DHYANI,NOIDA V. ITO WARD 54(1), DELHI

ITA 2351/DEL/2023

AI Insights

The case involves Neelam Dhyani, who appealed against the order of the Commissioner of Income Tax (Appeals) regarding the addition of Rs. 10,09,970 under section 68 of the Income Tax Act, 1961. This addition was made due to alleged unaccounted cash deposits in her bank account post-demonetization. Neelam Dhyani operates a mobile phone repair and service shop and contended that the cash deposits were from her business sales and were duly recorded in her books. The Assessing Officer had initially disallowed the cash deposits made after November 15, 2016, suspecting the acceptance of demonetized currency. The Tribunal's decision partially favored the assessee by remanding the issue back to the AO for a detailed examination of the currency notes deposited after the specified date.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298844 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJESH TIWARI
• Assessee Lawyers: RAJIV KUMAR BAGGA
• Section: 68

Judgement Text

"आयकर अपीलीय अिधकरण िदʟी पीठ “एस एम सी”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं.2351/िदʟी/2023 (िन.व. 2017-18) ITA No.2351/DEL/2023 (A.Y.2017-18) Neelam Dhyani, C-64A, Rajat Vihar, Sector-62, Noida, Uttar Pradesh 201301 PAN: AIQPD-5982-N ...... अपीलाथᱮ/Appellant बनाम Vs. Income Tax Officer, Ward-54(1) New Delhi 110001 ..... ᮧितवादी/Respondent अपीलाथŎ Ȫारा/ Appellant by : Shri Rajiv Kumar Bagga, Advocate ŮितवादीȪारा/Respondent by : Shri Rajesh Tiwari, Sr. DR सुनवाई कᳱ ितिथ/ Date of hearing : 11/12/2024 घोषणा कᳱ ितिथ/ Date of pronouncement : : 05/03/2025 आदेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as 'the CIT(A)') dated 23.06.2023, for assessment year 2017-18. 2. Shri Rajiv Kumar Bagga, appearing on behalf of the assessee submits that the assesee in appeal has assailed addition of Rs.10,09,970/- u/s. 68 of the Income Tax Act,1961(hereinafter referred to as ‘the Act’) on account of cash deposits in bank account alleging it to be unaccounted money of the assessee. The assessee is running a mobile phone repair and service shop. The assessee is also selling mobile phone recharge coupons. The assessee had deposited cash in bank account from her business sales. The money deposited in bank account has been duly accounted for and is recorded in the books. The Assessing Officer (AO) has made addition of 2 ITA No.2351/Del/2023 (AY 2017-18) Rs.10,09,970/- merely on assumption that after demonetization on 08.11.2016, the assessee was still accepting demonetized currency. Though, the Assessing Officer gave the benefit of cash deposited up to 15.11.2026 and has disallowed cash deposits thereafter Rs.10,09,970/-. The ld. Counsel further submitted that the assessee had furnished details of the cash deposits along with copies of cash deposits slips same are at page 74 to 90 of the paper book. The table at page 74 gives the breakup of currency notes deposited during demonetization. The AO has disallowed cash deposits in currency other than the demonetized currency notes of Rs.1000/- and Rs.500/-. He contended that the fact that entire deposits are from cash sales has been accepted by the Revenue and has therefore given the benefit of same by accepting cash deposits of up to 15.11.2016. Even if going by the analogy of AO for making additions only cash deposits in demonetized currency be disallowed. 3. Per contra, Shri Rajesh Tiwari representing the department vehemently defended the impugned order and prayed for dismissing appeal of the assessee. The ld. DR submits that the assessee has failed to substantiate the source of cash deposits during demonetization. The AO has rightly made addition u/s. 68 of the Act holding the cash deposits in bank during demonetization as unexplained money. 4. Both sides heard, orders of the authorities below examined. The short issue in present appeal is whether the explanation furnished by the assessee with regard to cash deposits during demonetization is acceptable. The assessee has deposited cash to the extent of Rs.15,08,970/- between the period 10.11.2016 to 30.12.2016. The AO has made addition of Rs.10,09,970/- u/s. 68 of the Act in respect of cash deposits after 15.11.2016 i.e. cash deposits between 22.11.2016 to 30.12.2016. The 3 ITA No.2351/Del/2023 (AY 2017-18) reason given by the AO for making addition is that the assessee has accepted demonetized currency after 08.11.2016. The AO has granted the benefit of deposit of old currency/demonetized currency up to 15.11.2016 and treated the remaining cash deposits as unexplained. The assessee has furnished details of cash deposits, the same is tabulated at page 74 of the paper book. Along with the table the assessee has also furnished copies of cash deposit slips indicating the denomination of notes deposited in the bank each time during the months of November and December 2016. In so far as source of cash deposits in the bank is concerned, the Revenue has accepted that the source of cash deposits is from cash sales. The dispute ultimately boils down to the issue of deposit of demonetized currency notes vs. valid currency notes. Taking into consideration entire facts of the case, I deem it appropriate to restore this issue to AO for limited purpose of verification with regard to the currency notes deposited after 15.11.2016 i.e. cash deposits on 22.11.2016 till to 30.12.2016. The disallowance, if any, be made only of the deposit of demonetized currency notes of Rs.1000/- and Rs.500/- and not the entire amount. 5. In light of above observations appeal of the assessee is partly allowed for statistical purpose, in the terms aforesaid. Order pronounced in the open court on Wednesday the 05th day March, 2025. Sd/- Sd/- (VIKAS AWASTHY) ᭠याियक सद᭭य/JUDICIAL MEMBER िदʟी/Delhi, ᳰदनांक/Dated 05.03.2025 NV/- 4 ITA No.2351/Del/2023 (AY 2017-18) ᮧितिलिप अᮕेिषतCopy of the Order forwarded to : 1. अपीलाथᱮ/The Appellant , 2. ᮧितवादी/ The Respondent. 3. The PCIT/CIT(A) 4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी 5. गाडᭅ फाइल/Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, DELHI "