ITA No.1232/Chny/2024

Parties Involved

Facts Summary

The assessee, M/s.Sqny Fireworks Industries, is in the business of purchasing and selling fireworks. For the Assessment Year 2017-18, the assessee filed its return of income on 29.03.2018, reporting a total income of Rs.9,19,180/-. The assessee deposited Specified Bank Notes (SBN) worth Rs.68,15,600/- during the demonetization period. The Assessing Officer (AO) questioned the nature and source of these deposits. The assessee explained that Rs.18,49,901/- was the closing balance as on 08.11.2016, and the remaining Rs.50,76,593/- was received from debtors who had purchased fireworks on credit during the Diwali festival. The AO accepted the explanation for the closing balance but rejected the explanation for the remaining amount, adding Rs.49,65,799/- under Section 69A of the Income Tax Act. The assessee appealed to the Commissioner of Income Tax (Appeals) who confirmed the AO's decision. The assessee then appealed to the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Whether the addition of Rs.49,65,799/- under Section 69A of the Income Tax Act is justified.

Judgment Outcome

Decided in favour of Assessee.

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