Loading judgment…
Facts
The assessee made cash deposits of Rs. 16,42,000/- in bank accounts during FY 2016-17, which were added as unexplained money under Section 69A by the AO and confirmed by the CIT(A). The assessee argued the cash was accumulated from prior withdrawals from their own bank accounts during FYs 2015-16 and 2016-17.
Held
The Tribunal found the assessee's explanation that the cash was accumulated from past withdrawals from their own accounts to be acceptable. Therefore, the addition made under Section 69A by the AO and confirmed by the CIT(A) was quashed as bad in law.
Key Issues
The key issue was whether the cash deposits, claimed to be sourced from prior bank withdrawals, constituted unexplained money under Section 69A of the Income Tax Act.
Sections Cited
143(3), 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, DELHI
Before: MS. MADHUMITA ROY
The instant appeal filed by the assessee is directed against the order passed by the Ld. CIT(A) NFAC, Delhi, dated 13.03.2024 arising out of the Assessment Order dated 20.12.2019 passed by the ITO-71(1) Delhi, under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for Assessment Year 2017-18. Addition of Rs.16,42,000/- under Section 69A of the Act on account of unexplained money is the subject matter before us:
The assessee failed to explain satisfactorily the source of such cash deposit made by him in different bank accounts during the financial year 2016-17. The assessee is a salaried person with Jammu & Kashmir Projects Constructions Corporation Jammu and the salary is the main source of income. Further that he is also having rental income and some saving bank interest as the another source of income. In terms of provision of Section 69A when the assessee is found to be owner of the money but not recorded the same in the books of account and no explanation or unsatisfactory explanation is given the said provision can be invoked. Under this present facts and circumstances of the case the main source of income of the assessee is salary and other source is FDR and saving bank interest. The income reflected in the bank statement and income tax return is self explanatory and thus, require no further explanation as was the case made out by the assessee before the First Appellate Authority. It was also further pointed out by the assessee that the assessee ensured full cooperation during the assessment proceedings and relevant documents were duly furnished to the Ld. AO and further explained the nature and source of the cash deposit made and therefore, the addition under Section 69 of the Act is not tenable in the eyes of law and liable to be quashed as was the ultimate submission made by the Ld. AR before us. The order passed by the Ld. CIT(A) has been duly perused; the details of cash deposits are mentioned therein. The cash was deposited was mainly accumulated with the assessee by withdrawing the same from the accounts during the Financial Year 2015- 16 & 2016-17, as mentioned by the assessee the details whereof were duly reproduced by the Ld. CIT(A) in the order impugned before us, and the explanation rendered by the assessee is further found to be acceptable. Thus, having regard to this particular aspect of the matter the addition made by the Ld. AO confirmed by the First Appellate Authority is found to be bad in law and therefore, quashed.
The appeal of the assessee is allowed.
Order pronounced in the open court on 16.06.2025