Demonetisation Cash Deposits Backed by Recorded Sales Cannot Be Taxed Under Section 68: ITAT Bangalore
The Bangalore Bench of the Income Tax Appellate Tribunal, in Sri Soger Malleshappa Manjunath Kanasoger v. ITO, removed an addition of ₹29,27,000 that had been made under Section 68 on account of cash deposited in the bank during the demonetisation window. The Tribunal found that the deposits were nothing but the proceeds of sales already entered in the assessee's regular, audited books.
The Question Before the Tribunal
Could cash deposits totalling ₹29,27,000, made while demonetisation was in force, be brought to tax as unexplained cash credits under Section 68, when the assessee had shown that the money came from cash sales recorded in his regular books, and the only complaint of the Revenue was that specified bank notes had been accepted after 08.11.2016?