RABINDRA NATH MOHANTY,BHUBANESWAR vs. ITO, WARD-3(4), BHUBANESWAR

ITA 91/CTK/2026Status: DisposedITAT Allahabad30 September 2026AY 2017-184 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the addition of Rs. 16,90,000/- as unexplained cash credit was not called for. The Tribunal noted that the assessee is a pensioner with no other income besides pension and interest. The AO himself accepted Rs. 2,50,000/- as a plausible source of cash holding. The Tribunal found no evidence to suggest the assessee earned any other income. The assessee's claim that the money was kept for his son's marriage was considered a plausible explanation that was not found to be false. Therefore, the addition made by the AO and confirmed by the CIT(A) was deleted. The ratio decidendi is that if an assessee provides a plausible explanation for cash deposits, and there is no evidence to the contrary, such deposits should not be treated as unexplained income, especially when the assessee is a pensioner with limited income sources.

What were the facts?

The assessee, Rabindra Nath Mohanty, is an appellant before the Income Tax Appellate Tribunal (ITAT) challenging an order from the NFAC, Delhi, for the assessment year 2020-21. The assessee, a retired state government senior clerk, lives on pension and bank interest. During the demonetization period (09.11.2016 to 30.12.2016), he deposited Rs. 19,40,000/- in his bank account. The Assessing Officer (AO) treated Rs. 16,90,000/- of these deposits as unexplained income, accepting Rs. 2,50,000/- as plausible. The assessee contended that he had withdrawn funds in earlier periods, maintained a cash book, and used cash for children's expenses and accumulated funds for his son's marriage. The revenue argued that the assessee failed to explain the source of the cash and how previously withdrawn cash was kept.

What were the issues?

1. Whether the addition of Rs. 16,90,000/- as unexplained cash credit is justified, considering the assessee's submissions regarding prior cash withdrawals, cash book maintenance, and accumulation of funds for his son's marriage, in light of Section 68 of the Income Tax Act, 1961. Assessee's Contention: The assessee argued that the AO erred in treating the deposits as unexplained. He submitted that he had withdrawn cash in earlier periods, maintained a cash book, and the deposited amount represented accumulated cash used for children's expenses and his son's marriage. He claimed no other source of income and that the revenue could not demonstrate any other source. Revenue's Contention: The revenue contended that the assessee failed to demonstrate where he kept the cash withdrawn earlier and how it was preserved. They argued that it is the assessee's responsibility to explain the source of cash deposits, not the department's duty to prove the source of income.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK

Before: SHRI GEORGE MATHAN & SHRI GOPALAN GURUSAMY

Hearing: 30/09/2026Pronounced: 30/09/2026

Per Bench: This is an appeal filed by the assessee against the order of the NFAC, DELHI [hereinafter referred to as the ‘CIT(A)’] in appeal no.NFAC/2020-21/10501124 dated 11.03.2026 for the assessment year 2020-21. 2. Shri S. K. Agarwalla, AR appeared on behalf of the assessee and Shri Vijay Singh, Sr. D.R. represented on behalf of the revenue.

3.

It was submitted by the ld. AR that the assessee was working as senior clerk in the state government department and he retired in 2009. It was the submission that he is living on his

The order continues below.

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