This legal analysis delves into the Income Tax Appellate Tribunal’s decision regarding Puneet Utreja’s appeal against the order of the National Faceless Appeal Centre dated March 5, 2021. The controversy primarily revolves around the addition of Rs. 8 lacs to the income of Puneet Utreja, which was part of a total of Rs. 16.20 lacs scrutinized due to deposits made during the demonetization period in 2016.
The appellant, Puneet Utreja, faced scrutiny for depositing Rs. 16.20 lacs in cash shortly after the demonetization announcement in India. The deposits were split into two parts: Rs. 8 lacs and Rs. 8.20 lacs, which were deposited on consecutive days. The assessing officer requested explanations for these deposits, suspecting them to be unaccounted income.
Utreja initially claimed that the deposits were withdrawals made for his impending marriage, which was later postponed. Subsequently, he changed his explanation, stating the funds were proceeds from a property sale according to an ‘agreement to sell’. The Income Tax Officer was not satisfied with the conflicting explanations or the lack of supporting documentation.
The National Faceless Appeal Centre confirmed the addition of Rs. 8 lacs to Utreja’s income, rejecting half of the total questioned amount. The ITAT upheld this decision, citing a lack of new evidence to counter the findings of the NFAC. The tribunal emphasized the need for documentary evidence when claiming such exemptions or deductions.
This case underscores the importance of maintaining and presenting clear, consistent, and documented evidence to support the legitimacy of cash transactions, especially those made during critical periods such as demonetization. It also highlights the scrutiny faced by taxpayers who make large cash deposits during such periods, and the rigorous standards applied by tax authorities in such cases.
Case Analysis: Puneet Utreja vs ITO Ward – 72(5), New Delhi, ITA No. 481/DEL/2021, AY 2017-18
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