MR.N. VENKATESH,NAMAKKAL vs. ITO,INTTAXN WARD 2(1), CHENNAI
What did the Tribunal hold?
The Tribunal noted that the assessee had withdrawn ₹.24,00,000/- in cash earlier for medical treatment but could not demonstrate the exact amount spent or remaining. Considering the propensity to save, the Tribunal granted 50% relief on the remaining addition.
What were the facts?
The assessee deposited ₹.11,70,500/- in cash into his NRO account during demonetization, claiming it was from funds withdrawn from his NRE account. The Assessing Officer treated this as unexplained cash deposit as there was no corresponding cash withdrawal from the NRE/NRO accounts.
What were the issues?
Whether the cash deposits made during demonetization were explained by prior cash withdrawals, and if not, what portion of the addition is sustainable.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Before: Shri V. Durga Rao & Shri Manoj Kumar Aggarwal
O R D E R
PER V. DURGA RAO, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals) 16, Chennai dated 30.03.2022 relevant to the assessment year 2017-18.
Brief facts of the case are that the assessee filed his return of income for the assessment year 2017-18 on 31.05.2017 admitting total income of ₹.1,95,490/-. Subsequently, the case was selected for scrutiny through CASS and notice under section 143(2) of the Income Tax Act, 1961 was issued to the assessee on 09.08.2019 as well as notice under section 142(1) of the Act was also issued calling for details. After considering the details furnished by the assessee against statutory notices and by following due procedure, the Assessing Officer has completed the assessment under section 143(3) of the Act dated 04.12.2019 assessing total income of the assessee at ₹.13,65,990/- by making addition towards unexplained cash deposit of ₹.11,70,500/- under section 69A of the Act. In the assessment order, the Assessing Officer has noted that on verification of the details furnished by the assessee, the assessee has deposited cash to the tune of ₹.11,70,500/- in the savings bank account held with HDFC Bank and called for the details. The assessee has submitted that the cash deposits were made out of the funds which were withdrawn from his NRE account and then deposited in cash into the NRO account during demonetization period. On perusal of the bank statement, the Assessing Officer has observed that there was no cash withdrawal from 01.04.2016 to 08.11.2016 in both the NRE and NRO account. Accordingly, the above amount of ₹.11,70,500/- was brought to tax as unexplained money under section 69A of the Act. On appeal, after considering the submissions of the assessee, the ld. CIT(A) gave relief to the extent of ₹.3,00,000/-.
On being aggrieved, the assessee is in appeal before the Tribunal. By filing a written submission enclosing cash account of the assessee, the ld. Counsel for the assessee has submitted that as directed by the Bench on the day of hearing on 15.09.2022, the assessee has furnished cash account to establish the withdrawal of ₹.24,00,000/- from the HDFC Bank account on 20.01.2015, which was available for re-deposit of SBN’s on 10.11.2016, 14.11.2016 and 15.11.2016 and prayed for deleting the addition of ₹.11,70,500/-.
On the other hand, the ld. DR has submitted that the assessee may be withdrawn ₹.24,00,000/- from the HDFC bank account on 20.01.2015, but it is unbelievable that the assessee has retained the cash to the extent of ₹.11,70,500/- even after lapse of nearly 21 months of its withdrawal.
We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. The case of the assessee is that the assessee is an NRI and he has drawn ₹.24,00,000/- in cash on 20.01.2015 for the purpose of emergency medical treatment of his parents who are residing in a village near Namakkal. However, the assessee could not able to demonstrate as to how much amount was spent for medical treatment and what was available with the assessee.
On perusal of the cash account, we also find that the assessee has also made withdrawals frequently between 20.01.2015 to 21.09.2016 after withdrawing ₹.24.00 lakhs on 20.01.2015. Keeping in mind the fact of Indians having propensity to save whatever morsel of small sums that comes our way, we are inclined to give relief to the extent of 50% of the balance addition of ₹.8,70,500/- and confirm the balance addition under section 69A of the Act.
In the result, the appeal filed by the assessee is partly allowed. Order pronounced on 30th November, 2022 at Chennai.
More judgments on Section 69A
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- Ashok Singh, Jaipur vs ACIT, Circle-2 Jaipur, JaipurITA 1540/JPR/2025[2015-16]Status: Disposed21 Oct 2026AY 2015-16
- Hemal Paresh Madeka, Rajkot vs Asst.Commissioner of Income Tax…ITA 955/RJT/2026[2020-21]Status: Disposed19 Oct 2026AY 2020-21
- Neepaben Sunnybhai Motwani, Rajkot vs Income Tax Officer, RajkotITA 875/RJT/2026[2021-22]Status: Disposed19 Oct 2026AY 2021-22
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