Guru Nanak Steel Traders vs. The ITO

Parties Involved

Facts Summary

The assessee filed its return of income on 18/12/2017 declaring total income of Rs. 2,67,090/-. The return was selected for complete scrutiny due to an abnormal increase in cash deposit during the demonetization period. A show-cause notice was issued on 30/11/2019 regarding the unexplained cash deposit of Rs. 72,84,000/- during the period 09/11/2016 to 31/12/2016. The assessee submitted that the cash was deposited from disclosed sources as per the cash book. However, the Assessing Officer (AO) found the explanation unsatisfactory and added the amount under Section 69A of the Act. The assessee appealed to the Commissioner of Income Tax (Appeals) who reduced the addition to Rs. 36,42,000/-. The assessee further appealed to the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Whether the addition of Rs. 36,42,000/- made by the Ld. CIT(A) is justified?
• 2. Whether the explanation provided by the assessee regarding the source of cash deposits is reasonable?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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