Shravan Singh Parmar, Mumbai vs ITO Ward 2(1), Thane, Thane

Court: INCOME TAX APPELLATE TRIBUNAL, "SMC" BENCH, MUMBAI

Case Number: ITA No.6611/MUM/2024

Judgment Date: 2025-05-19

Judges: Shri Sandeep Singh Karhail (Judicial Member), Shri Bijayananda Pruseth (Accountant Member)

Keywords: Income Tax Act, Section 69A, Section 144, Section 115BBE, Section 133(6), Section 234A, Section 234B, Section 234C, Section 234D, Penalty 271(1)(c), Demonitization, Cash Deposit, Federal Bank, Unexplained Income, Fast Track Gold Loan, Gold Ornaments, Laxmi Jewellers, Faceless Appeal, ITAT Mumbai, Shravan Singh Parmar, Cash Loan Recovery, Specified Bank Notes, RBI Circular, Tamil Nadu State Marketing Corporation Ltd vs ACIT, CBDT Circular, Maharashtra, Applicability in India

Summary:

The ITAT Mumbai ruled in favor of the assessee, Shravan Singh Parmar, by deleting an addition of ₹12,24,500 made under Section 69A of the Income Tax Act. The cash deposit during demonetization was explained as loan repayments from customers against gold ornaments. The tribunal found no fault in the source of income, and disregarded the Revenue’s objection based on RBI circulars due to lack of inquiry into customers' details.

Full Text:

1. What this case law is about:



This case deals with whether cash deposits made by an individual (Shravan Singh Parmar) during the demonetization period could be treated as unexplained income under Section 69A. Mr. Parmar deposited ₹12.24 lakhs, claiming it was repayment of loans given against gold. The tribunal ruled in his favor after finding his documentation sufficient and the tax authority’s inquiry lacking.



2. If you face a similar situation:

- Maintain records of loan agreements, customer PANs, and transaction history.

- Respond to notices under Section 142(1) or 133(6).

- You have the right to appeal under Section 250 and approach ITAT.



3. If you didn’t file an appeal:

- Delay can sometimes be condoned. Use this case as a precedent in your submission.

- Cite this order to defend similar deposits during demonetization.



4. Future care:

- Avoid large undocumented cash transactions.

- Use banking channels and maintain loan books.

- Ask for a video hearing in faceless schemes.



5. Applicability:

- Applicable across India unless overturned.

- Especially relevant for small lenders using gold loans or cash-based recovery.



ORDER HIGHLIGHT:

"We are of the considered view that the assessee has duly explained the source of cash deposited by him in his bank account during the demonetization period, and same cannot be treated as unexplained money under section 69A of the Act. Accordingly, the impugned addition of Rs.12,24,500/- is deleted." — ITAT Mumbai

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