Cash Deposits During Demonetization from Amul Parlour Sales: ITAT Accepts Source, Deletes Rs. 27.37 Lakh Addition

The Income Tax Appellate Tribunal (ITAT) accepted the source of cash deposits made during demonetization as sales from an Amul parlour, thereby deleting the addition made by the assessing officer. The assessee provided evidence linking the cash deposits to the daily sales at their Amul parlour, which the ITAT found satisfactory. This ruling highlights the importance of providing credible evidence to explain the source of cash deposits, especially during periods like demonetization when scrutiny was high. The tribunal's decision emphasizes that if the assessee can reasonably substantiate the source of the deposited cash, additions to income based solely on the deposits may not be warranted. This case offers relief to small businesses that faced scrutiny for cash deposits made during the demonetization period.