This case centers on the appellant, Harvinder Kaur’s appeal against the tax assessment for A.Y. 2017-18 which included a significant income adjustment based on cash deposits made during the demonetization period in India. The primary dispute revolves around the assessment officer’s addition of Rs. 18,00,000 to the appellant’s income, categorized as unexplained cash deposits.
The appellant argued that the deposits were out of cash withdrawals and other verifiable sources, which she had documented. Despite her submissions, both the original assessing officer and the CIT(Appeals) upheld the addition, leading to her appeal to the Income Tax Appellate Tribunal.
The case was heard by the ITAT without the appellant’s presence but based on detailed written submissions. The Tribunal noted the lack of opportunity given to the appellant to substantiate her claims with adequate documentation during the initial assessments.
The ITAT set aside the earlier orders and remanded the case back to the assessing officer for a fresh assessment, directing that the appellant be given a fair opportunity to present her case. This decision underscores the importance of procedural fairness in tax assessments, especially in cases involving significant economic events like demonetization.
The outcome of the appeal highlights the challenges taxpayers face in proving the source of cash deposits during periods of financial upheaval and the critical role of comprehensive documentation in such disputes.
The final judgment was pronounced on January 19, 2023, allowing the appeal for statistical purposes and setting a precedent for similar cases in the future.
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