LALIT KRISHAN DHAM,KAPURTHALA vs. ITO (WARD-1), KAPURTHALA

ITA 331/ASR/2025Status: DisposedITAT Amritsar30 September 2026AY 2017-185 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition of Rs.12,98,250/- made by the AO was not sustainable. The Tribunal noted that the AO's basis for the addition was an assumption about human behavior, specifically questioning why a retired bank official would hold significant cash rather than earning interest. The AO considered the cash flow chart constructed by the assessee to justify deposits and found the reflected household expenses to be unrealistically low. However, the Tribunal found that the assessee, a 73-year-old retired senior citizen, had personal needs for security, medical requirements, and contingencies. The Tribunal concluded that the assessee had demonstrated the factual availability of cash in hand as an opening balance. Once this opening balance was taken into account, it explained the source of the deposits that led to the addition. Therefore, the addition was deleted. The grounds raised by the assessee were allowed.

What were the facts?

The assessee, Lalit Krishan Dham, a retired senior citizen and former General Manager of Oriental Bank of Commerce, filed his return of income for Assessment Year 2017-18. During assessment proceedings, the Assessing Officer (AO) noted cash deposits totaling Rs.38,57,500/- in the assessee's bank accounts. The AO accepted an explanation for Rs.12 lakhs deposited from his son's partnership firm withdrawal and considered a peak credit of Rs.28,98,250/-. However, the AO made an addition of Rs.12,98,250/-. The Commissioner (Appeals) confirmed this addition. The assessee appealed to the Income Tax Appellate Tribunal (ITAT) challenging the addition.

What were the issues?

1. Whether the addition of Rs.12,98,250/- made by the Assessing Officer on account of cash deposited in the bank account is sustainable in law, considering the opening balance of cash in hand available with the assessee. Assessee's Contention: The assessee argued that the AO failed to consider the opening balance of cash in hand amounting to Rs.18,39,600/-. If this opening balance is taken into account, no addition would be warranted. The assessee relied on a detailed cash receipt and payment statement prepared from 01.04.2015 to 10.03.2017, corroborated by bank statements, to demonstrate the availability of cash as an opening balance. The assessee also submitted a cash flow statement for the year under consideration, which the AO did not find deficient. Revenue's Contention: The judgment does not record specific arguments made by the Revenue before the Tribunal.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR

Before: SH. SAKTIJIT DEY, HON’BLE & SH. GIRISH AGRAWAL, HON’BLE

Hearing: 29.09.2026Pronounced: 30.09.2026

PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:

This appeal is filed by the assessee against the order of the ld. CIT (A), NFAC, Delhi, dated 05/03/2025. 2. The only issue involved in the present appeal in respect of addition of Rs.12,98,250/- made on account of cash deposited in the bank account.

3.

Brief facts as culled out from the records are that assessee is a retired senior citizen who worked as general manager with Oriental Bank of Commerce. Assessee had filed his return of income on 24.07.2017, reporting the total income at Lalit Krishan Dham 2 Assessment Year: 2017-18 Rs.4,27,160/-. In the course of assessm

The order continues below.

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