SINNAPPANG GANESAN,NAMMAKKAL vs. ITD WARD 1, TIRUCHENGODE, TIRUCHENGODE

PER SS VISWANETHRA RAVI, J.M :

This appeal by the Assessee is against the order dated 24.09.2025

passed by the Learned Commissioner of Income Tax [herein after “CIT(A),

National Faceless Appeal Centre(NFAC), Delhi, for the assessment year

2017-18.

issue eminates for our consideration is as to whether the ld.CIT(A) is justified in confirming the addition made by the AO u/s. 69A of the

Income-tax Act, 1961 [‘the Act’ in short].

of income filed. On an information gathered during online verification, the

Assessing Officer [‘AO’ in short] found that the assessee deposited a

cash of Rs.12,57,000/- into his bank accounts maintained with Indian

Bank and Tamilnadu Mercantile Bank Limited from 09.11.2016 to

31.12.2016. In order to verify the genuineness of said cash deposits, the

AO issued notice u/s. 142(1) of the Act. According to the AO, the

assessee not complied to the said notice and completed the assessment

in the absence of any statements from assessee, inter alia, making

addition on account of unexplained money u/s. 69A of the Act, to an

extent of Rs.13,87,000/- vide its order dated 21.11.2019 passed u/s. 144

of the Act. The assessee challenged the same before the ld.CIT(A), inter

alia, making two set of arguments.

been taken being the total credits in the assessee’s bank account. The

ld.CIT(A) held said arguments are not tenable. Further, second argument

was that the withdrawals made in October, 2016 should have been

accepted as source for cash deposits during demonetization period. The Page - 2 - of 8 ld.CIT(A) held the said argument is factually and legally untenable as the

said withdrawals were made in mid October, 2016 nearly 25 days before

the demonetization period, vide his finding at Page no. 9 of the impugned

order. Accordingly, he confirmed the order of the AO. Not satisfied with

the findings of the ld.CIT(A), the assessee is before us.

ld.CIT(A) did not give any consideration to the first line of arguments with

reference to making addition taking into account entire turnover as

deposits. Further, he drew our attention to Page no.5 of the impugned

order by referring tabular form and submits that the ld.CIT(A) even failed

to give any consideration to the cash withdrawals made in October, 2016

and to the deposits made in the month of November, 2016. He submits

that the said evidence of withdrawals and deposits were made available

before the ld.CIT(A) which were even filed before this Tribunal and drew

our attention to Page no. 4 to 15 of the paper book. Further, he drew our

attention to the written submissions placed at Page no.1 to 3 of the paper

book and prayed to take said written submissions for consideration of the

issue on hand. He submits that the written submissions of second line of

arguments is similar as that of raised before the ld.CIT(A) and this

Tribunal. He referred to the order of this Tribunal in the case of

Ganapathy Paneerselvam vs ITO in ITA No. 609/Chny/2025 at Page no. Page - 3 - of 8 28 to 42 of the paper book and submits that the ITAT, on similar identical

facts deleted the addition made therein.

on record and admittedly as contended by the ld.AR, we find no

consideration was given by the ld.CIT(A) for reference to second line of

argument in taking into account the withdrawals in the month of October,

2016 is source for deposits in the month of November, 2016 during the

demonetization period. On perusal of the assessee’s submissions which

were referred in page no.5 of the impugned order, it is noted that the

assessee made cash withdrawals from bank account on 13.10.2016 twice

to an extent of Rs.5,80,000/- (Rs.3,80,000 + Rs.2,00,000). Further, thrice

on 15.10.2016 to an extent of Rs.12,15,000/- (Rs.2,30,000 + Rs.80,000 +

Rs.9,05,000) totalling to Rs.17,95,000/-. Further, cash deposits as found

by the AO were made into bank account for Rs.50,000/- on 11.11.2016,

Rs. 2,50,000/- on 15.11.2016, Rs.7,00,000 on 16.11.2016, Rs.3,07,000

on 28.11.2016 and Rs.80,000 on 12.12.2016. Further, the assessee

stated that the banks were not accepting cash deposits not at one go due

to rush, the bank asked the account holders to make deposit in

installments thereby there was time gap between withdrawals and Page - 4 - of 8 deposits. We find bank account, statement of Tamilnadu Mercantile Bank

Ltd account in A/c no. 366100050302081 for the period from 07.08.2016

to 31.03.2017 at page no. 4 & 5 of the paper book. We note that the

assessee made withdrawals at Rs.2,72,652/- as against deposits of

Rs.2,85,832/-. Further, the bank statements of Tamilnadu Mercantile

Bank Ltd in A/c no. 126100050112941 for the period from 01.04.2016 to

31.03.2017 at page no. 6 of the paper book, wherein it is noted that the

assessee made withdrawals at Rs.2,98,988/- as against deposits of

Rs.3,05,472/-. Further, bank statement for account no. 462721801 of

Indian Bank is at Page no. 7 to 10 of the paper book, wherein it is noted

that the assessee made withdrawals of Rs.95,00,281/- as against the

deposits of Rs.95,19,067/- for the period 01.04.2006 to 31.03.2019.

Further, we find showing the proof of cash deposits in Tamilnadu

Mercantile Bank Ltd and in Indian Bank from pages 12 to 15 of the paper

book. On an examination of the tabular form given in written submissions

at page no. 2 of the paper book, with that of Bank certification placed at

pages 21 to 27. On an examination of the certificate showing that cash

withdrawals issued by the Tamilnadu Mercantile Bank, South Car Street

dated 13.12.2019 at page no. 21 shows that the assessee withdrawn

cash on 15.10.2016 to the total extent of Rs.9,85,000/- (Rs.80,000 +

Rs.9,05,000). Further, another certificate dated 17.09.2019 at page no.

22 shows the withdrawal to the extent of Rs.4,60,000/- (Rs.3,80,000 + Page - 5 - of 8 Rs.80,000) on 13.10.2016 and 15.10.2016, respectively. Further, another certificate dated 30.08.2019 at page no. 23 of the paper book issued by the Indian Bank, which is specialised SME Branch, shows the total withdrawal of Rs.4,30,000 on 13.10.2016 and 15.10.2016, respectively.

Therefore, the assessee withdrew money to the total extent of Rs.18,75,000/- in the month of October, 2016 i.e., before demonetization.

certificate dated 26.08.2019 issued by the TNB, South Car Street, Branch which is at page no. 24 of the paper book shows cash deposits totaling to Rs.4,67,000/- (Rs.2,50,000 + Rs.2,17,000) on 16.11.2016 and

28.11.2016, respectively. Further, another certificate dated 26.08.2019 issued by the TNB, Goundampalayam Branch at page no. 25 of the paper book establishes total cash deposits to an extent of Rs.3,00,000

(Rs.2,50,000 + Rs.50,000) on 15.11.2016 and 12.12.2016, respectively. Further, another certificate dated 17.09.2019 issued by the TNB, Goundampalayam Branch at page no. 26 shows deposits of Rs.30,000/- on 12.12.2016 and certificate dated 17.09.2019 issued by the TNB,

Goundampalayam Branch at page no. 27 clearly shows deposits of Rs.50,000/- on 11.11.2016. Page - 6 - of 8

issued by the respective banks, we find the total withdrawals to an extent

of Rs.18,75,000/- and total cash deposits as per the certificates issued by

the banks to an extent of Rs.13,37,000/- only, which supports the

contention made before the ld.CIT(A), which is reproduced in page no. 5

of the impugned order. As we discussed above, these evidences were

before the ld.CIT(A), but however, no consideration was given inspite of

showing the withdrawals and deposits. We find the nexus between the

withdrawals and deposits as there was no contrary evidence brought on

by the AO with reference to spending of the withdrawals by the assessee.

Ganapathy Paneerselvam (Supra), we note that on similar circumstances,

the Tribunal by placing reliance on the decision of Hon’ble High Court of

Karnataka in the case of Smt. P. Padmavathy vs ITO in iTA No. 414/2009

dated 06.10.2020 and in the case of Jaya Aggarwal v ITO [2018] 92

taxmann.com 108 (Del)by Hon’ble High Court of Delhi held that once

money is shown to be in the account and withdrawn, what the assessee

do with that money till it was actually deposited is not the concern of the

Department. As long as the source is explained and established and

when the money is withdrawn from the savings bank account, it is not

possible to hold that the source is not explained. We find the facts of the Page - 7 - of 8 case are discussed in Para no.3 & 4 of the said order and the explanation

of the assessee before the AO and ld.CIT(A) were discussed in Para no.

6 to 8 of the said order. On consideration of said submissions of

assessee before the AO and the ld.CIT(A) and coupled with the

arguments of AR, which are referred in para 11 of the said order, we find

the facts and circumstances in the present case are similar to the facts

therein and taking into account the submissions in the second line of

argument of the AR, we find the order of the ld.CIT(A) is not justified in

holding the view of the AO is correct in making addition u/s. 69A of the

Act. Thus, the addition confirmed by the ld.CIT(A) is deleted. Thus,

grounds raised by the assessee are allowed.

(एस एस एस. आर एस आर आर. रघुनाथा आर रघुनाथा रघुनाथा) रघुनाथा (यस यस यसयस यस यस यसिव�ने� यस िव�ने� िव�ने�रिव िव�ने� रिव रिव) रिव (S. R. RAGHUNATHA) (SS VISWANETHRA RAVI) लेखा लेखासद�यकेसम� लेखा लेखा सद�यकेसम� सद�यकेसम�/Accountant Member सद�यकेसम� �याियक �याियकसद�य �याियक �याियक सद�य सद�य/ Judicial Member सद�य 05th May 2026. Chennai, Dated: JPV

Copy to: 1. Appellant 2. Respondent 3. CIT - Chennai/Coimbatore/Madurai/Salem. 4. DR 5. GF

PRASANNA Digitally signed by PRASANNA VANI JETTY Page - 8 - of 8 VANI JETTY Date: 2026.05.06 15:37:08 +05'30'