Inderpal Singh Chawla Vs. ITO, Ward-1(2), Raipur

Parties Involved

Facts Summary

Inderpal Singh Chawla, engaged in the business of plying and hiring of trucks, filed his return of income for the assessment year 2017-18 on 30.03.2018, declaring an income of Rs.9,61,520/-. His return was selected for scrutiny assessment under Section 143(2) of the Income-tax Act, 1961. During the assessment proceedings, it was observed that Chawla had made cash deposits of Rs.62 lacs in his bank accounts during the demonetization period (09.11.2016 to 31.12.2016). The Assessing Officer (A.O) called upon Chawla to justify the source of these cash deposits. Chawla claimed that the cash deposits were sourced from cash withdrawals of Rs.98.80 lacs made during the demonetization period, but the A.O did not accept this explanation. The A.O held the entire amount as unexplained money under Section 69A of the Act and added it to Chawla's income, determining his income at Rs.71,61,520/-. Chawla appealed against this order to the Commissioner of Income-Tax (Appeals), which was dismissed. Chawla then appealed to the Income Tax Appellate Tribunal (ITAT).…

Legal Issues

• 1. Whether the addition of Rs.62,00,000/- as unexplained money under Section 69A of the Act is justified.
• 2. Whether the assessment made under Section 143(3) of the Act is bad in law.

Judgment Outcome

Decided in favour of Assessee.

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