2023 (1) TMI 1384 - AT - Income Tax

Addition u/s 68 - case was selected for scrutiny on the ground that the assessee deposited large sums during demonetization period - to explain the source of the deposits in the bank, the assessee submitted that the deposits were received from 15 members in old currency between 09-11-2016 to 11-11-2016, which were deposited in the bank account HELD THAT - It is seen that the assessee is a Urban Cooperative Credit Society which received Rs. 1,78,400/- from 15 depositors whose all the necessary particulars have been given. The list comprises receipt of Rs. 85,970/- from 3 small saving agents and Rs. 94,000/- from 12 customers. The assessee furnished necessary details in respect of the depositors. AO refused to accept the genuineness of the transaction and made the addition u/s. 68 of the Act AR has brought to my notice an order passed in Prathamika Krushi Pattina Sahakari Sangha Niyamitha Itagi Pkpssn ( 2022 (6) TMI 151 - ITAT BANGALORE in which the addition made under similar circumstances has been deleted. In this order, the Tribunal relied on another order in Bhageeratha Pattina Sahakara Sangha Niyamitha 2022 (2) TMI 1243 - ITAT BANGALORE . No contrary order on such facts, in favour of the Revenue, has been brought on record by the ld. DR. Thus we direct to delete the addition sustained in the first appeal. Decided in favour of assessee.

Summary

Issues Involved:
The appeal arises from the order of the National Faceless Appeal Centre (NFAC) u/s. 250 of the Income-tax Act, 1961 for the assessment year 2017-18. The main issue is the addition of Rs. 1,78,500/- made by the Assessing Officer u/s. 68 of the Act.

Confirmation of Addition u/s. 68:
The case involved a Cooperative Credit Society that declared total income of Rs. 27,520/-. During scrutiny, it was found that the society deposited large sums during demonetization. The deposits totaling Rs. 1,78,500/- were explained to have been received from 15 members in old currency and deposited in the bank account. Despite providing details of the depositors and offering to present them, the Assessing Officer made the addition u/s. 68 of the Act. The Tribunal, after considering the details provided by the society and citing a precedent where a similar addition was deleted, overturned the impugned order and directed the deletion of the addition of Rs. 1,78,500/-.

Conclusion:
The Tribunal allowed the appeal, setting aside the addition of Rs. 1,78,500/- made by the Assessing Officer u/s. 68 of the Income-tax Act, 1961. The decision was based on the genuineness of the transactions and the lack of contrary orders favoring the Revenue on similar facts.