TMI Blog2022 (11) TMI 618X X X X Extracts X X X X X X X X Extracts X X X X ..... y. AO grossly erred in not accepting the source for balance cash deposits even though, the assessee has filed necessary evidences to prove the availability of source for cash deposits. CIT(A) without appreciating the fact simply confirmed the additions made by the AO. Hence, set aside the order of the Ld.CIT(A) and direct the AO to delete the addition made towards cash deposits u/s.69A - Appeal filed by the assessee is allowed. - ITA No. 527/Chny/2022 - - - Dated:- 14-10-2022 - SHRI G. MANJUNATHA , HON BLE ACCOUNTANT MEMBER Appellant by : Mr. S. Sridhar , Erode Adv Respondent by : Mr. P. Sajit Kumar , JCIT ORDER PER G. MANJUNATHA , AM : This appeal filed by the assessee is directed against the order of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income for the AY 2017-18 on 07.03.2018 declaring total income of Rs.4,37,090/- and agricultural income of Rs.7,83,000/-. The case has been selected for limited scrutiny to verify cash deposits during demonetization period. During the course of assessment proceedings, the AO gathered information u/s.133(6) of the Act, regarding cash deposits from Karur Vysya Bank, Kuniamuthur Branch, Coimbatore, and KVB Main Branch, Coimbatore. As per the information submitted by the Bank, the assessee has deposited a sum of Rs.17,25,500/- in Specified Bank Notes of the denomination of Rs.500/- Rs.1,000/- on various dates. The AO called upon the assessee to explain source for cash deposits, for which, the assessee has filed a cash book, as per which, cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of ITAT Visakhapatnam Bench in the case of ITO v. Sri Tatiparti Satyanarayana in ITA No.76/Viz/2021 order dated 16.03.2022. 5. The Ld.DR, on the other hand, supporting the order of the Ld.CIT(A), field a detailed Written Submissions dated 21.09.2022 and argued that as per the Specified Bank Notes (Cessation of Liabilities) Act, 2017, which came into effect from 31.12.2016, the assessee is prohibited from dealing with Specified Bank Notes w.e.f.09.11.2016 for all purposes except for the purpose of exchange of such Specified Bank Notes held on or before 08.11.2016. Further, assuming for a moment, the assessee can transact in Specified Bank Notes up to 31.12.2016, but the assessee could not prove the receipt of sale consideration of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has claimed to have obtained Rs.13,00,000/- on 9th November, 2016 as sale consideration in specified notes. Since as per the Ordinance, the specified notes ceases to be legal tender for all transaction other than for the purpose of exchange of the same under section 4 of the Ordinance and the assessee being not one of the notified persons permitted to receive the specified notes, the amount so claimed to have been received is not legally recognizable as a legally acceptable source. Further most importantly, the assessee has not proved with documentary evidence that the consideration received of Rs.13,00,000/- comprised of 'Specified notes' in full. The assessee is just attempting to telescope the so stated receipt as an explanat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng relevant provision of Specified Bank Notes (Cessation of Liabilities) Act, 2017, held that there is no prohibition under the Act to deal with Specified Bank Notes up to 31.12.2016. Therefore, in my considered view, the observation of the AO on this regard totally incorrect and liable to be rejected. 7. Having said so, let us come back to explanation of the assessee with regard to source for cash deposits. The assessee explained before the AO that she had received a sum of Rs.13 lakhs from Smt.Vedhavathy for sale of property on 09.11.2016. In fact, the AO accepted, the assessee has received consideration for sale of property from Smt.Vedhavathy and the purchaser has also filed a confirmation letter stating that she had paid considerati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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