The Income Tax Appellate Tribunal’s decision in the case of Krishna Goyal vs. ACIT, Central Circle-14, New Delhi, challenges the addition of Rs. 18,00,000 under Section 69A of the Income-Tax Act, 1961, for the assessment year 2017-18. The case centers on the nature of cash deposits made during the demonetization period in India.
Krishna Goyal, the appellant, is a resident individual who faced scrutiny from the Income Tax Department following her cash deposits totaling Rs. 23,00,000 during the demonetization in 2016. The IT Department questioned the source of these deposits, leading to a legal challenge over Rs. 18,00,000 deemed unexplained by the authorities.
During the tribunal proceedings, it was noted that Goyal had made significant cash withdrawals in the financial years 2015-16 and 2016-17, which she claimed were kept for medical emergencies due to her cancer diagnosis. The Tribunal, upon reviewing the facts and circumstances of Goyal’s situation, including her serious health condition, decided in her favor. The addition of Rs. 18,00,000 to her income was deleted, accepting her explanation that the cash was indeed from prior withdrawals meant for potential medical emergencies.
This judgment highlights the considerations the Income Tax Appellate Tribunal may take into account in cases involving large cash deposits during demonetization, especially when medical emergencies are cited as a reason for holding significant cash at hand. It underscores the importance of maintaining detailed financial records and providing a cogent explanation for cash transactions when questioned by tax authorities.
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