Analysis of ITA No. 1553/DEL/2021 involving Jagdamba Optics Pvt. Ltd., Delhi, against the Deputy Commissioner of Income Tax, Circle 13(1), New Delhi, concerning the assessment year 2017-18. The case revolves around the contentious additions made during the demonetization period.
The appellant, Jagdamba Optics Pvt. Ltd., faced scrutiny due to significant cash deposits made during the demonetization period. The Income Tax Department questioned the authenticity of these deposits, suspecting them to be unaccounted income.
Upon review, the tribunal noted discrepancies in the department’s claims about the abnormal increase in cash deposits. It was found that the sales and deposit patterns did not exhibit any abnormality when compared to the previous fiscal years. The tribunal directed the deletion of the addition of Rs. 39,92,742/- after validating the cash sales recorded in the audited books of accounts.
This decision emphasizes the importance of maintaining detailed and timely documentation of financial transactions, especially during extraordinary events like demonetization. The case highlights the challenges businesses face during such periods and the scrutiny they might endure from tax authorities.
Jagdamba Optics Pvt. Ltd. vs DCIT on Demonetization Deposits Dispute: ITA 1553/DEL/2021
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