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2023 (9) TMI 939 - ITAT MUMBAIAddition u/s 69A - cash deposited in bank on various dates during the demonetization period - Appellant being a milk supplier was exempt under the Government/RBI notification and as such the source of the cash deposits stood explained satisfactorily - CIT(A) dismissed the appeal by simply stating that the Appellant has not been able to show that the Appellant is entitled to claim benefit of Notification No. S.O. 3408(E), issued by Ministry of Finance (Department of Economic Affairs), dated 08.11.2016 as the Appellant has not filed any material to establish that the Appellant qualify as a milk booth operating under authorization of Central or State Government - HELD THAT:- The approach adopted by the CIT(A) cannot be countenanced. Notification No. S.O. 3408(E), provided that SBNs would continue to be legal tender for purchase of milk at GCMM. Thus, in our view, AO as well as CIT(A) were incorrect in holding that the Appellant was not covered by the notification. Even if for the sake of arguments it is believed that that though the Appellant was not covered by the aforesaid Notification, the Appellant had a bonafide belief that the Appellant was entitled to the benefit of the Notification and therefore, permitted to receive SBNs, and that the Appellant did accept SBNs as valid tender. Appellant had provided explanation about the source and nature of the cash deposited in the bank account as cash received from sale of milk in the normal course of business. The explanation furnished by the Appellant was rejected by the AO and CIT(A) by merely holding that the Appellant could not have received SBNs as legal tender and therefore, cash deposited by the Appellant was undisclosed income without verifying the documents and testing the explanation offered by the Appellant by examining the actual purchase/sale of milk. Thus, the averments made by the Appellant, which in our view are supported by the documents furnished, went uncontroverted. Addition made by the AO u/s 69A of the Act is deleted. Present appeal preferred by the Appellant is allowed.
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