This article offers a detailed examination of the ITA 1716/DEL/2020 case between Amar Singh from Gurgaon and the ACIT International Taxation, Gurgaon for the assessment year 2017-18. The discussion centers on the tribunal’s dissenting order and the legal scrutiny of cash deposits post-demonetization.
Amar Singh, a non-resident individual employed in the Merchant Navy, was assessed by ACIT International Taxation, Gurgaon. The contention revolved around unexplained cash deposits made into his bank accounts during the assessment year 2017-18, which were deemed undeclared by the IT department.
The IT department scrutinized deposits totaling Rs.4,00,000, questioning the legality of Rs.60,000 received from his wife and another Rs.2,23,000 deposited during the demonetization period. The tribunal reviewed submissions and decided in favor of Amar Singh, citing his regular tax compliance and the lawful nature of the income disclosed.
The tribunal’s decision to overturn the additions under Section 69A for the cash deposits cited the taxpayer’s compliance and the legitimate sources of the funds. The judgment referenced various legal precedents and CBDT instructions that supported the assessee’s claims.
The case sets a precedent on how cash deposits during critical periods like demonetization should be handled, especially when the assessee provides coherent explanations backed by documentation. It highlights the necessity for tax authorities to consider the context and evidence before making additions for undeclared income.
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