AO Adds SBN Deposits by NBFC as Unexplained Cash Credit u/s 68 During Demonetization: ITAT Directs AO to Reassess and Apply CBDT Guidelines

The ITAT directed the Assessing Officer (AO) to reassess deposits of Specified Bank Notes (SBNs) by an NBFC during the demonetization period, which had been treated as unexplained cash credits under Section 68 of the Income Tax Act. The ITAT noted that the AO had not properly applied the Central Board of Direct Taxes (CBDT) guidelines regarding SBN deposits. The tribunal directed the AO to re-examine the issue in light of the guidelines, ensuring a more fair and transparent assessment. This decision is significant in the context of demonetization-related tax assessments, providing clarity on the procedure for scrutinizing SBN deposits by financial institutions.