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Income Tax Appellate Tribunal, ‘A’ (SMC
Before: SHRI MAHAVIR SINGH
आदेश /O R D E R This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals)-16, Chennai dated 04.01.2023. The assessment was framed by the Income Tax Officer, Chennai for the assessment year 2017-18 u/s.143(3) of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide order dated 03.12.2019.
The only issue in this appeal of assessee is as regards to the order of CIT(A) upholding the addition by restricting the same to - 2 - Rs.7.54 lakhs being demonetized cash deposit as against added by the AO at Rs.15.08 lakhs. For this, assessee has raised various factual grounds which need not be reproduced.
The brief facts are that the assessee is a non-resident and filed his return of income for the relevant assessment year 2017-18 on 27.07.2017 admitting total income at Rs.2,10,880/-. The assessee’s case was selected for scrutiny assessment for verification of cash deposit made by him i.e., demonetization cash to the tune of Rs.15.08 lakhs in the savings bank account maintained with ICICI Bank, R.A.Puram, Chennai. The AO during scrutiny assessment proceedings required the assessee to explain the cash deposit during demonetization period i.e., demonetized cash and assessee explained vide letter dated 13.11.2019 that he has withdrawn a sum of Rs.15 lakhs from his savings bank account on 12.01.2016 to keep the same as savings to meet the important emergency expenses but the AO on perusal of bank statement of ICICI Bank, savings bank account No.602601539771 noted that the amount of Rs.15 lakhs was withdrawn by the assessee on 02.03.2015 and hence, the AO has not accepted the explanation of the assessee for the reason that the withdrawal was made in March, 2015 and redeposit explained to be made on 12.11.2016 after almost gap of two years. Therefore,
- 3 - AO treated the cash deposit of Rs.15.08 lakhs in his ICICI Bank as unexplained and to be taxed u/s.115BBE of the Act. Aggrieved assessee preferred appeal before CIT(A).
The CIT(A) considered the explanation of the assessee and availability of funds, restricted the addition of unexplained demonetized cash deposit of Rs.7.54 lakhs as against addition made by AO of Rs.15.08 lakhs by observing as under:- Via, Ground of appeal No. 2, the appellant contends that he had previous withdrawals in cash which form source for the cash deposit of Rs. 15,08,000/-. According to the appellant's A.R, the appellant had total cash availability of Rs.42,38,100/- for the purpose of meeting domestic expenditure, urgent family needs etc.
To verify the said claim of the appellant, 360 degree profiling of the appellant was obtained and it is seen, that the appellant has purchased a property from Mr. Simon John Philip and NS, Renuka Philip on 03.03.2015, situated at Semmenjeri village, Plot No: 8A, S. No. 84/1 Part, Thruvidanthai Rev, Village, 603, 112, Tamilnadu. And he has withdrawn an amount of Rs. 15,00,000/- on 02.03.2015. The property purchase falls immediate to the next day of cash withdrawal. Thus, human probability and the economic circumstances in the Real Estate market in India act as a corroborative evidence that the cash withdrawal was for the purpose of purchase of property. Hence, the appellants argument that Rs. 15,00,000/- was available for cash deposit cannot be given Credence to.
Leaving this 15,00,000/-, the appellant and his wife was in possession of Rs. 27,38,100/-, However, this amount mostly pertains to F.Y. 2015-16 and not F.Y. 2016-17. Hence, in view of the same, taking, all the socio-economic conditions and particularly the extra-ordinary financial circumstances prevailing during demonetization period, the bank account statements into consideration, it is felt reasonable that 50% credence can be given to the cash deposit out of Rs.15,08,000/-, as explained. Thus, the A.O is directed to delete Rs. 7, 54,000/- as unexplained cash under section 69A. The remaining amount of Rs. 7,54,000/- thus stands as unexplained cash deposit under section 69A calling for the applicability of 115BBE, The amended provision of section 115BBE applies for - 4 - 2016-17 and hence the rate of tax is applicable as prescribed under the Act.
Aggrieved, now assessee is in appeal before the Tribunal for the addition confirmed by CIT(A) of Rs.7.54 lakhs.
I have heard both the sides and gone through the facts and circumstances of the case and materials available on record. I noted that the assessee is able to prove that the total family withdrawals for the period 2015-16 & 2016-17 is to the extent of Rs.42,38,100/- including assessee’s wife Mrs. Zannathul Firdouse. The assessee before the lower authorities contended and filed cash in hand after withdrawal of assessee’s wife at Rs.7,61,000/-. The relevant details are as under:- S.No. F.Y Name of the Bank Amount in INR (Rs.) 1. 2016-17 ICICI Bank 7,23,000/- 2. 2016-17 SBI Bank 1,00,000/- 3. 2015-16 ICICI Bank 6,04,000/- 4. 2015-16 SBI 3,65,100/- 5. 2014-15 ICICI Bank 2,75,000/- (March,2015)
The assessee has made withdrawals of Rs.20,67,100/- from his bank account on several dates ranging from Rs.5,000/- to Rs.2,00,000/- and further an amount of Rs.15,00,000/- was withdrawn in March, 2015 i.e., total available fund with the assessee in cash is Rs.42,38,100 before demonetization i.e., 08.11.2016. Taking into
- 5 - consideration the entire withdrawal of the family and also giving weightage to family expenses, in my view the demonetized cash deposit of Rs.15 lakhs is explained in the absence of any proof that the assessee has spent the entire available funds of Rs.42,38,100/- for personal needs. The CIT(A) has already accepted 50% of cash deposit of Rs.7,54,000/- and balance of Rs.7,54,000/- was treated as unexplained but there is no reason given that how the assessee has spent the above amount of family withdrawals of Rs.42,38,100/- Even otherwise that the assessee has withdrawn this amount of Rs.15 lakhs in March, 2015 and credence should be given to the same. Keeping in view the totality of facts and circumstances of the case, I accept the cash deposit of Rs.15 lakhs as explained and delete the balance addition of Rs.7.54 lakhs confirmed by the CIT(A) and allow the appeal of assessee.
In the result, the appeal filed by the assessee is allowed.