Dismissal of Tax Appeal in Case of Amar Nath Harbans Lal vs. ITO, New Delhi Due to Insufficient Evidence in Cash Deposit During Demonetization

Dismissal of Tax Appeal: Amar Nath Harbans Lal vs. ITO, New Delhi

Case Number: ITA 1716/DEL/2022

Parties Involved

• Appellant: Amar Nath Harbans Lal, M-73, Greater Kailash, Part-1, New Delhi.
• Respondent: ITO, Ward-47(5), New Delhi.

Assessment Year

2017-18

Case Conclusion

The Income Tax Appellate Tribunal (Delhi Bench) dismissed the appeal filed by the assessee, Amar Nath Harbans Lal, against the order of the National Faceless Appeal Centre (NFAC), Delhi, related to the assessment year 2017-18. The case, presided over by Shri C.M. Garg, Judicial Member, centered on various grounds of appeal challenging the order passed on 01.06.2022, which upheld the assessment order dated 21.12.2019.

The assessee raised concerns regarding the non-issuance and service of notice under section 143(2), lack of proper and reasonable opportunity to reply, incorrect and unlawful assessment order, unconstitutional actions against the facts of the case, and additional illegal and impugned additions made to the declared income, among other issues.

The case detailed the appellant’s engagement in small-scale trading of jewelry, silver, and allied items, declaring an income under section 44AD of the Income Tax Act, which was challenged due to significant cash deposits during the demonetization period. The appellant argued that the turnover and subsequent sales declared, alongside a higher percentage of profit, were consistent with the provisions of law and were unjustly added to by the assessing officer (AO) and the CIT(A).

During the proceedings, the arguments revolved around the justification of cash deposits made during demonetization, the lack of proper inquiry by the AO, and the appellant’s adherence to the presumptive taxation scheme under section 44AD of the Act. Despite various defenses and references to precedential judgments, the tribunal found the assessee’s explanations insufficient and upheld the additions made by the AO, leading to the dismissal of the appeal.

The tribunal’s decision reiterates the importance of substantiating the source of cash deposits and the necessity for assessees to provide cogent material evidence to support their claims, especially concerning cash transactions during sensitive periods like demonetization.

This case serves as a significant point of reference for similar disputes involving the interpretation of tax laws, especially pertaining to cash deposits during the demonetization period, the presumptive tax scheme, and the scrutiny of documentation provided in support of such claims.

Final Judgment

After due consideration of the submissions, evidence, and applicable legal provisions, the tribunal dismissed the appeal for lack of merit, emphasizing the need for detailed evidence when contesting assessments related to high-value cash deposits.

Date of Pronouncement

06.10.2022

Dismissal of Tax Appeal in Case of Amar Nath Harbans Lal vs. ITO, New Delhi Due to Insufficient Evidence in Cash Deposit During Demonetization