| Question And Answer | |
|---|---|
| Subject: | SEc. 68 and Cash deposit during demonetization by NBFC |
| Category: | Income-Tax |
| Querist: | prakash |
| Answered by: | Research Team |
| Tags: | cash credits, demonetization, demonetization by NBFC |
| Date: | November 15, 2023 |
Assessee is NBFC registered under Co Act as well as RBI. During the period of demonetization assessee co accepts cash in old currency amounting to Rs 1410000/- from the borrowers up to 14.11.2016 and from 15.11.2016 till 31.12.2016 amounting to Rs. 2010000/-. Ao has made addition U/sec. 68 on the ground that NBFC are not permitted to accept currency in Old Notes from any one and therefore the amount is unexplained cash credit to be added U/sec. 68, eventhough assessee co has given complete details of the persons from whom amount is received towards repayment of loan taken from NBFC. Whether action of AO is justified ?
Pl guide .
Addition is not justified . The assessee has a fair chance of succeeding in appeal . If. The matter in appeal the assessee can get the confirmation or an affidavit explaining the cash deposited . In R.S. Diamonds v. ACIT (2022) 98 ITR 505 / (2023) 198 ITD 344 (SMC)(Mum.)(Trib.) Cash was deposit into bank account during Demonetization period .Source explained as advance from customers in respect of sales bills raised which are recorded in the books of account .–Books of account not rejected .Addition was deleted. Relied on Lakshmi Rice Mills v. CIT (1974) 97 ITR 258 (Pat)(HC) and ACIT v. Hirapana Jewelers (2021) 189 ITD 608 (Vishakha )(Trib.) Refer , Charu Aggarwal (Smt.) v. Dy. CIT (2022) 96 ITR 66 (Trib.) (Chd.)(Trib) Kalaneedhi Jewellers LLP v. Dy. CIT (2022)96 ITR 66 (Trib.)(Chd.)(Trib.) Anantpur Kalpana. v. ITO (2022) 194 ITD 702 (Bang.)(Trib.) Anantpur Kalpana. v. ITO (2022) 194 ITD 702 (Bang.)(Trib.)