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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
O R D E R Per Kavitha Rajagopal, J M: 1. This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals)- (‘ld.CIT(A) for short), u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2017-18.
The assessee has challenged the addition of Rs. 14,48,000/- being the cash deposit during the demonetization period as unexplained income u/s 69A of the Act.
The brief facts are that the assessee is an individual and had filed his return of income dated 04.08.2017 declaring total income of Rs. 3,10,088/-. The assessee’s case was selected for scrutiny under CASS for the reason that large cash deposits during demonization period was found and business return was filed for the first time. The Ld.
(A.Y.2017-18) Mr. Abbasali Chinikamwalla v/s ITO AO has sought for details of cash deposits aggregating to Rs. 17,10,000/- in five different bank accounts of the assessee. Based on submission of the assessee the AO made an addition u/s 69A of the Act of Rs. 14,48,000/- for the reason that assessee has failed to explain the nature and source of the said deposits to the satisfaction of the Ld. AO. The assessee was in appeal before the Ld. CIT(A) challenging the impugned addition made by the AO. The Ld. CIT(A) upheld the addition made by the AO for the reason that the assessee had failed to explain the source of said deposits. The assessee is in appeal before us challenging the order of the Ld. CIT(A).
The Ld. AR for the assessee contended that the assessee being a retired senior citizen was working for Qatar Civil Aviation Authority and had return back to India on 03.05.2016. The Ld. AR further stated that the assessee was living on the pension and savings income and that the assessee has no other source of income other than this. The Ld. AR further contented that assessee has submitted all the details of bank accounts held by the assessee since FY 2010-11 and has brought our attention to all the withdrawals in these years from the assessee’s bank account. The Ld. AR also contended that the assessee was unmarried and was living along with his brother’s family whom the assessee was supporting financially for house hold expenses and medical expenses. The Ld. AR also pointed out that huge amounts were withdrawn by family members and was later deposited back in assessee’s account. The Ld. AR contented that the money deposited in the assessee’s account was accumulated cash withdrawals from assessee’s bank account for various expenses of assessee and his relatives. The Ld. AR prayed for deleting impugned addition made by the Ld. AO and upheld by the CIT(A). The Ld. AR
(A.Y.2017-18) Mr. Abbasali Chinikamwalla v/s ITO relied on the various decisions of the Tribunal wherein similar addition has been deleted on identical facts.
The Ld. DR on the other hand controverted the said fact and stated that it was highly improbable for any person to hold such cash surplus inspite of the cash expenses incurred by the assessee as per the submission made by the assessee. The Ld. DR further stated that the assessee has not substantiated his claim by cogent evidences and the Ld. DR relied on the orders of the lower authorities.
We have heard the rival submissions and perused the material available on the record. It is observed that the assessee has made a cash deposit of Rs. 17,10,000/- in four banks namely DCB Bank, Syndicate Bank, Central Bank of India and Bank of Maharashtra amounting to Rs. 4,41,000/-, Rs. 4,66,000/- Rs. 3,36,000/- and Rs. 2,05,000/- respectively. The assessee who was working in Qatar had transferred his salary earned there to his NRE account in India which was withdrawn by his family members for various expenses. The assessee has also contended that the withdrawn amount was retained for the purpose of buying a moderate accommodation, repair, wedding expenses of family members and for religious purposes. The assessee has furnished all the bank statements along with the cash flows statements from 01.04.2010 to 31.12.2016. The Ld.AO failed to accept the contention of the assessee that the assessee has retained the said cash amount in this possession and the same was deposited during the demonetization period. The Ld.AO made an addition of the impugned amount as unexplained investment in hands of the assessee u/s 69A of the Act. It is observed that the assessee has furnished additional evidences before the first appellate authority
(A.Y.2017-18) Mr. Abbasali Chinikamwalla v/s ITO pertaining to details of the family member who are dependent on the assessee financially. The assessee has filed details pertaining to cash withdrawals, cash expenses and cash deposited, surplus and cumulative surplus for all these years. From the above observations it is evident that either the assessee or his family members have been making huge withdrawals from his accounts since FY 2010-11 which has even gone to the extent of withdrawing Rs.14,00,000/- during the FY 2014-15. The assessee’s only source of income was his salary remitted from Qatar to his account held in India and also his pension received after his retirement. We do not find any other source of income either from business or profession earned by the assessee and hence there cannot be any issue of undisclosed source of income earned by the assessee. The Ld.AO has also not made any observations pertaining to this fact. The assessee being an unmarried man will also not have incurred much of expenditure except for giving money to his family members for their expenses. With regard to how the cash withdrawn was utilized by the assessee the Ld.AR relied on the decision of the coordinate bench in Shri Girigowda Dasegowda Vs ITO (ITA No. 360/Bang/2022) which has considered the decision of the Hon’ble Karnataka High Court in the case of Smt. P. Padmavathi Vs ITO in of 2009 wherein it was held that the revenue cannot contend that the assessee should have explained how he had utilized the cash withdrawn and that the same was still available with the assessee, the coordinate bench also held that by considering the source of deposits the past savings available with the assessee should also be considered. We would also like to place our reliance on the decision of the coordinate bench in Om Prakash Nahar Vs ITO (ITA No. 960/Del/2021) wherein on identical facts the Tribunal has deleted the addition made on cash deposits during the demonetization.
(A.Y.2017-18) Mr. Abbasali Chinikamwalla v/s ITO 7. From the above observations we are of the considered opinion that the assessee has reasonably substantiated the source of deposits made by him during the demonetization period. We do not find any justification in upholding the addition made by the Ld.AO and confirmed by the Ld. CIT(A) and hence the impugned addition is deleted
In the result appeal filed by the assessee is allowed.
Order pronounced in the open court on 10.07.2023