MAMTA MAHESHWARI,GWALIOR vs. ITO-4(2), LUCKNOW-NEW, LUCKNOW

PER ANADEE NATH MISSHRA, A.M.: (A) The present appeal has been filed by the assessee against the order passed by the Ld. Addl/Joint Commissioner of Income Tax (Appeals) [hereinafter “the Ld. Addl/JCIT(A)”]-1, Vadodara dated 09.12.2025 for the assessment year 2017-18. The grounds of appeal are as under: -

“1. Imposition of tax on demonetized money to the extent of Rs.9,80,000/- by both the Authorities by ignoring points of fact thast the appellant was sole legal heir of her own parents the appellant was also in job for more then 20 years and is now after retirement from job house lady but assuming that the appellant is a partner in a firm engaged in jewellery business therefore, the conclusion drawn is absolutely arbitrary and is liable to be set aside. 2. The imposition of Income Tax to the extent of differential tax of Rs.762591/- is absolutely incorrect and unreasonable therefore the imposition is liable to be rejected and set aside. 3. the imposition of interest to the extent of Rs.266545/- plus additional interest as applicable till date is absolutely unreasonable and is liable to be set aside.” (B) In this case, assessment order dated 01.12.2019 was passed by the Assessing Officer under section 143(3) of Income Tax Act, 1961 (“Act”, for short) whereby the assessee’s total income was determined at Rs.14,10,340/- as against returned

ITA No.116/LKW/2026 Page 2 of 5 income of Rs.4,30,340/-. In the aforesaid assessment order, an addition of Rs.9,80,000/- was made by the Assessing Officer on account of cash deposit by the assessee in bank. The assessee’s appeal against the aforesaid assessment order was dismissed by the Ld. CIT(A) vide impugned appellate order dated 09.12.2025 whereby he confirmed the aforesaid addition of Rs.9,80,000/-. Both the Assessing Officer as well as Ld. CIT(A) disbelieved the submissions made by the Assessee that the aforesaid amount of Rs.9,80,000/- was deposited by the assessee in bank account out of withdrawal made in the past for the marriage of the assessee’s daughter and for household expenses.

(C) At the time of hearing, the Ld. Counsel for the assessee submitted that the appellant assessee is a house wife and she is the only child of her parents. He also drew attention to the explanation furnished by the assessee during the assessment proceedings. This explanation is contained in paragraph no. 2 of the assessment order; and is being reproduced below for the ease of reference: -

“2. During the course of assessment proceedings, the assessee was required to substantiate the source of cash deposits to the tune of Rs. 12,25,000/- which were deposited in the form of Rs. 2,45,000/- each in five bank accounts maintained with different banks mentioned in ITR for the AY 2017-18. In compliance, the assessee submitted reply through e-filing portal on 13/05/2019 stating that "after the demise of my mother in 2014, I was too grief stricken to look after her belongings. During demonetization, I was forced to unlock parental house. Also I was told few days prior to her demise that the house needed major repairs for which she has kept cash to meet the expenses but was not able to get the things done as per her wishes. The cash which I inherited wars deposited. The assessee submitted in reply dated 18/11/2019 through e-filing portal that once again I would like to reiterate that I am a 52 years old housewife at present. I have worked in different organizations and institution for more than 20 years I had saved my eaming for years for my needs in emergencies which I had deposited and responded to IT queries I also explained to your in detail regarding the inherited ash after the demise of my parent as I am the only child and the natural heir. My mother use to keep cash at home due to her severe ill health and old age. She was not in a condition to stand in a bank queue. The money was kept at home for house renovation, her knee replacement surgery and various medical treatments. After my mother's demise I had gone out of her town to join my family. The sorrow and pain of loss of my

ITA No.116/LKW/2026 Page 3 of 5 beloved mother who was so very close to me was so deep and prevailed that money matter was out of my mind at that time. I was too engulfed with sadness of my memories dying watching her slipping towards death, I was not in a state for quiet long to think of the cash lying at home. During the demonetization I was forced to open my locked parental house and deposited the cash which I recovered from there. Further the assessee submitted another reply through e-filing portal in response to notice u's 144 dated 21/11/2019 stating therein "I have lived in many cities and as per my convenience opened bank account near to my residence for my case, I have not transferred my accounts at a consolidated place due to which many of my accounts have become dormant. All the details as per known to me of my bank account have already been furnished my income tax return. Moreover I am not aware that I cannot have a number of accounts. Sir whatever amount I inhented from my late parents was duly informed in my return for assessment 2017-18. Sir I am the only heir to my family, proof of which is attached as a copy of ration card which I found to bring in your notice. Being a natural heir all my parental savings which were kept in the form of cash due to their ill health, unavailability of support for plying for medical treatment for any sort of emergency was automatically inherited. Sir my late parents forgot to keep documentations of cash which they kept for their convenience never knowing that after their demise their natural heirs will be asked to submit documents pertaining to their cash. Also after the demise of my father most of the money inherited by my mother kept them at home due to her severe illness. She also closed my entire father's bank account as she was the only nominee. Sir it is also pertinent to bring in your notice that my father worked all his life in a private firm and his retirement benefits was the only means available to my mother for her survival for the rest of her life after the demise of my father. Sir during my parents' lifetime i.e. on an average eightly year they were never asked to furnish documents did not relate to their savings and holdings, nor did they expect of any such situation in which their natural heir will be expected to provide documentations of their savings after their demise. Also it is important to bring in your notice that prior to demonetization all the expense/eventualities were paid in cash so my mother's all medical expenses, hospital bills were paid in cash and cash was also kept for mitigation any further eventuality. As per first reply the assessee submitted that I am 52 years old, housewife, an honest and law abiding citizen, never have been indulged in any unlawful activities. All the submissions made by the assessee were duly examined and it was noticed that in all the submission the assessee is narrating the health issues of her mother who dies in year 2014 as per attached details and consequent inheritance of money but no documentary evidences regarding availability of cash was provided for either inherited or personal savings." In Cash Transaction 2016 compliance, the assessee submitted the source of deposits as amount inherited after demise of mother.” (C.1) The Ld. Counsel for the assessee also drew attention to explanation contained in assessee’s ground of appeal, in the appeal filed before ld. CIT(A). For the ease of reference, the same is reproduced below: -

ITA No.116/LKW/2026 Page 4 of 5 “3.1. The appellant is in appeal on the following grounds Ground No. 1 Because the appellant a house wife and the is the only child of her parents. That the appellant wants to draw your attention towards the fact that at the income has been property recorded and shown in the Income Tax Return. Because the learned Income Tax Officer 4-2. Lucknow-New has wrongly imposed the lay on deposited old currency in the bank during the period of 9th November 2016 to 30th December 2016 amounting to Rs. 1176000.00 Because the learned Assessing Officer did not outsider the material evidence and the explanation without proper application of mind in a most arbitrary and illegal manner. Because the appellant has property replied online, electronically, of the show cause notices which was issued by the learned assessing officer and also explained him in person regarding the deposited old currency in the bank during the period of 9th November, 2016 to 30th December 2016. Because the appellant was an only heir of her parents, her father was Mechanical Engineer and worked in a private organization, after retirement benefits was in the bank, but after his death her mother withdrew from the bank and kept them in the house because she was suffering front cancer and so many deceases and she could not visit bank every tame for her daily use expenses, medicines and renovation of house, her parents lifetime an average about eighty years, they were never expected of any such situation in which their natural heirs will be expected to provide documentations of their savings after their demise Because the appellant was in service and worked 20 years in past in various institutions and organizations, she saved the money from her earnings and because she is the only heir of her parents she found the cash after demise of her parents. Because the appellant have already tried her best to explain the ignored her written explanation and supporting documents which was presented before him, the learned officer wrongly and in an arbitrary imposed the tax on under the learned assessing officer but he section 115 BB E, 25 percent of tax on Deemed Income under section 115 BBE, CE 5S, and interest for deferment of advance payment under section 234 B and 234 C Total disputed amount of Rs. 1017550.00. Because the assessing officer erred in law to reject the presentation without going into the facts of the case and failed to ascertain the correctness of the presentation. That the assessing officer failed to exercise its discretion fairly and equitably and also failed to apply law in a meaningful manner which subserves the ends of justice. That the appellant craves leave to amend, add or delete anyone on more grounds of appeal. Therefore, it is most respectfully prayed that the appeal please be allowed and the impugned order may please be set aside and relief as per grounds of appeal may please be granted and the declared version may please be accepted holding for the appellant liable to tax as admitted. Any other relief as may be deemed just and proper in the circumstances of the case may also be granted.” (C.1.1) The Ld. Counsel for the assessee submitted further that the explanation furnished by the assessee [as referred to in foregoing paragraph (C) and (C.1) of this order] should be accepted; and the addition should be deleted.

ITA No.116/LKW/2026 Page 5 of 5 (C.2) The Ld. Departmental Representative for the Revenue relied on the orders of the Assessing Officer, and Ld. CIT(A); but left the matter to the discretion of the Bench.

(C.2.1) Both sides have been heard. Materials record have been perused. The explanation furnished by the assessee before the Assessing Officer and before the Ld. CIT(A); as contained in foregoing paragraph (C) and (C.1) of this order; are found to be satisfactory. Therefore, the Assessing Officer is directed to delete the addition of the aforesaid amount of Rs.9,80,000/-. Accordingly, the aforesaid impugned appellate order of the Ld. CIT(A) is set aside and the appeal of the assessee is allowed. All grounds of appeal are treated as disposed off in accordance with the aforesaid directions and order. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 04/05/2026.

Sd/- [ANADEE NATH MISSHRA] ACCOUNTANT MEMBER DATED: 04/05/2026 Vijay Pal Singh, (Sr. PS) Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. DR 5. Guard file By order //True Copy//