I-T tribunal says jeweller made 'unexplained' bank desposits of Rs 98 crore during demonetisation

The Income Tax Appellate Tribunal (ITAT) has upheld the addition of Rs. 97.96 crores as an unexplained credit in bank accounts by a jeweller during demonetisation in 2016.

The bench ruled that the said jeweller failed to prove the identity and creditworthiness of creditors, genuineness of transactions, as well as failed to explain the nature and source of the credited sum of money under Section 68 of Income Tax Act which lays such an onus on the tax assessee.

The bench held that the jeweller mischievously and unscrupulously brought demonetised notes into the network by wrongfully depositing them with the bank. ITAT agreed with the Tax Department's conclusion that no legal sale of gold could have been made using prohibited currency, noting that non-availability of gold with the jeweller made it difficult to infer that there was a sale agreement with anonymous buyers.

Musaddi Lal Gems and Jewels had deposited over Rs 57 crores in its accounts in denominations of Rs 500 and Rs 1,000 after demonetisation was announced in 2016. The jeweller had claimed that the amount was deposited by 2153 customers as advance after demonetisation was announced.

In 2017, the company's MD gave a confession to Hyderabad police that he received over Rs 90 crores in demonetised currency notes as business transactions, and went on to retract his confession in 2019.