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2022 (4) TMI 593 - AT - Income TaxAddition u/s 69A - cash deposits made in the bank account during the demonetization period - HELD THAT:- We find from the order of the Ld. AO that he has not disputed the books of accounts of the assessee. We also find from the paper book submitted by the assessee that the requirements like membership of the depositor, date of deposit, amount received, depositor PAN, AADHAR and other particulars are provided by the assessee before the Ld. AO which was not disputed by the Ld. AO. We also find no merit in the orders of the Ld.AO that section 69A can be invoked. In the instant case, the assessee has recorded the cash in its books of account, explained the details of deposits, provided the credentials of the depositors to the AO. AO merely because of two depositors namely Mr. B. Kanakaraju and Mr. G. Santosh Kumar denied to have opened any account with the assessee, it cannot be a ground to be declared the deposits as bogus. AO has not provided any opportunity to the assessee to cross-examine these two persons by the assessee. AO erred in observing that the deposits received from C. Venkata Rao and Smt. Chaganti Lakshmi are by way of cheques but has wrongly noted that the deposits have been received by cash by the assessee. AO is also not correct in declaring ₹ 500/- and ₹ 1000/- SBN notes as illegal from 8/11/2016 because section 2(1)(a) of The Specified Bank Notes (Cessation of Liabilities) Act, 2017 states that "appointed day" means the 31st day of December, 2016. Further, section 5 of The Specified Bank Notes (Cessation of Liabilities) Act, 2017 also states that from the appointed day, no person shall, knowingly or voluntarily, hold, transfer or receive any specified bank note. So it can be inferred from the said Act that the amounts are considered to be legally tendered till 31/12/2016. AO also failed to observe that in the absence of an alternative, when there is only one option available to the assessee ie., to deposit the specified bank notes with a bank, and accordingly the assessee has deposited ₹ 3,22,80,000/- into the bank. These cash deposits which is the aggregate of opening balance of ₹ 2,96,34,776/- as on 8/11/2016 and the amount of cash deposits received from 8/11/2016 to 2/12/2016 amounting to ₹ 3,22,80,000/- is in accordance with law. In view of the above discussions, we find no infirmity in the order of the Ld. CIT(A) and therefore no interference is required. - Decided in favour of assessee.
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