S. Balaji Mech-Tech Private Ltd. vs. ITO, Ward 22 (1), 3696, Sharadhanand Marg, New Delhi.

Parties Involved

Facts Summary

The case involves an appeal by S. Balaji Mech-Tech Private Ltd. against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC) dated 11.01.2024 for the Assessment Year 2017-18. The assessee filed its return of income declaring an income of Rs.9,88,387/- on 29.10.2017. The case was selected for scrutiny under CASS for the reason of abnormal increase in cash deposit during the demonetization period as compared to pre-demonetization period and higher turnover reported in service-tax return as compared to ITR. The Assessing Officer observed that the assessee has successfully explained the reconciliation of turnover as per the VAT return and audited accounts. He further noted that there has been no change in the turnover reported in the VAT returns filed after demonetisation. The AO accepted the cash deposit in new currency of Rs.29,00,000/- and made addition of Rs.1,62,46,533/- on account of unexplained cash deposits u/s 68 of the Act during demonetization period. The assessee appealed to the CIT(A) who sustained the additions made by the AO. The assessee further appealed to the ITAT.…

Legal Issues

• 1. Whether the Ld. CIT (A) has erred in affirming the addition of Rs.1,62,46,533/- made by the AO as unexplained money u/s 68 of the Income Tax Act.
• 2. Whether the Ld. Lower Authorities erred in presuming that the whole cash deposited during demonetization period is an afterthought without considering the fact that VAT returns were filed well within time and no VAT return has been revised.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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