2024 (9) TMI 1523 - HC - Income Tax

Addition u/s 69A - Treatment of cash deposits during demonetization in 2016 as unexplained income - HELD THAT - The assessment for Assessment Year 2017-2018 was completed on 27.12.2019 u/s 143(3) of the Income Tax Act, 1961 by treating cash deposits was made by the appellant during demonetisation in 2016 as unexplained income u/s 69A. The case of the appellant is that the proceedings initiated pursuant to the notice under Section 143(2) and further notice u/s 142(1) and 11.10.2019 u/s 142(1) were confined to source of cash deposits made during the demonetization period and therefore inclusion of entire cash deposits as unexplained income of the Appellant was unwarranted. The appellant relied on the decision of Purushottam Jhawar, 2013 (10) TMI 838 - ANDHRA PRADESH HIGH COURT rendered in the context of Section 158 BB of the Income Tax Act, 1961as it stood then the decision of the Allahabad High Court in Commissioner of Income Tax (Central), Kanpur vs. Fertilizer Traders, 2013 (12) TMI 725 - ALLAHABAD HIGH COURT and that of this High Court in Principal Commissioner of Income Tax, Central 1, vs. A. Anbukkannan, 2019 (5) TMI 1129 - MADRAS HIGH COURT . We have considered the arguments advanced by appellant. As such, no questions of law much-less any substantial questions of law arises for our consideration in this appeal. Therefore, this tax appeal is without any merits. The dispute relates to cash deposits made by the Assessment during demonetisation which was treated as unexplained income of the appellant. Appeal dismissed.

Summary

Issues:
1. Appeal against the order of the Income Tax Appellate Tribunal for the assessment year 2009-10.
2. Treatment of cash deposits during demonetization in 2016 as "unexplained income" for the assessment year 2017-2018.

Analysis:
1. The tax appeal was filed against the order of the Income Tax Appellate Tribunal for the assessment year 2009-10. The Tribunal partly allowed and partly rejected the appeal. The appellant claimed agricultural income but failed to provide evidence to support it. The appellant also could not prove money lending business activities with necessary evidence. The Tribunal considered the appellant's explanation regarding cash deposits but found insufficient evidence. However, based on the agricultural income declared for the previous two financial years, the Tribunal attributed a portion towards savings, allowing relief for a portion of the cash deposits while sustaining the rest. The appeal was partly allowed based on this analysis.

2. For the assessment year 2017-2018, the appellant declared income and agricultural income in the return filed. However, cash deposits made during demonetization were treated as "unexplained income." The appellant argued that the proceedings were limited to the source of cash deposits during demonetization and contended that treating all cash deposits as unexplained income was unwarranted. The appellant relied on various court decisions to support their case. The court reviewed the arguments and found no substantial questions of law for consideration in the appeal. The dispute over cash deposits during demonetization was upheld, and the Tribunal's order was found to be without any infirmity. Consequently, the tax appeal was dismissed without costs.

This detailed analysis covers the issues raised in the tax appeal against the orders of the Income Tax Appellate Tribunal for different assessment years, highlighting the key arguments and decisions made by the court in each case.