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Demonetization was an unexpected announcement with the purpose of curbing black or parallel economy of the country. Owing to sudden announcement of demonetization, persons who had accumulated their unaccounted income as on 08.11.2016 in the form of cash of old Rs. 500/- and Rs. 1000/- currency notes were left with no option but to deposit their unaccounted income in their bank accounts or stand losing the entire money.

The brief facts of the present case are that the appellant filed her return of income on 07.11.2017 declaring total income of Rs. 12,53,650/- under presumptive taxation u/s 44AD. During the scrutiny assessment proceedings, it was found that the assessee had deposited cash of Rs.44,61,000/- in her United Bank of India account between 09.11.2016 and 30.12.2016. When called upon to explain the source of these deposits, the assessee submitted that the same were out of cash sales and opening cash balance.