Unexplained Cash Deposits during Demonetization: ITAT Limits Addition to ₹10 Lakhs Considering Possible Cash Sales

The ITAT limited the addition for unexplained cash deposits during demonetization to ₹10 lakh, considering possible cash sales. The taxpayer had deposited a substantial amount of cash during the demonetization period but could not fully explain the source. The tribunal acknowledged the possibility of legitimate cash sales and reduced the addition to ₹10 lakh. The decision highlights the importance of understanding the context of cash deposits during the demonetization period and emphasizes that additions should not be arbitrary, especially when legitimate business activities are plausible. It encourages fair and reasonable assessments by tax authorities.