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Facts
The assessee had a cash deposit of ₹10,00,000 in their bank account during demonetisation. The assessee explained the source as loans, past savings, gift from son, and sale of old gold, supported by additional evidences. However, the Assessing Officer was not satisfied and made an addition under section 69A of the Act.
Held
The Tribunal held that the assessee had provided sufficient evidence to explain the source of the cash deposit. The CIT(A) was faulted for ignoring these evidences, and the addition made by the Assessing Officer was deemed unjustified and unsustainable.
Key Issues
Whether the cash deposit of ₹10,00,000 can be treated as unexplained money under section 69A of the Act, given the evidences provided by the assessee and the CIT(A)'s failure to consider them.
Sections Cited
69A
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Income Tax Appellate Tribunal, ‘SMC’ BENCH, BANGALORE
Before: SHRI WASEEM AHMED
PER WASEEM AHMED, ACCOUNTANT MEMBER:
This is an appeal filed by the assessee against the order of the Addl/JCIT(A)-10, Mumbai vide order dated 19/02/2025 in DIN No.ITBA/APL/S/250/2024-25/1073432504(1) for the assessment year 2017-18.
The appeal is delayed by 73 days. The reason explained is that the order of the learned CIT(A) was communicated in the name of the deceased assessee. The legal heir was not aware of the order. Only after
Page 2 of 4 receiving communication in June 2025, the legal heir came to know about the same. Immediately, the appeal was filed. We are satisfied that there was reasonable cause for the delay. Therefore, the delay is condoned.
The Assessing Officer noticed that the assessee had deposited ₹10,00,000 in his bank account during the demonetisation period. The assessee explained that the source was from loan taken from friends, past savings, gift by his mother-in-law and chit fund. However, the Assessing Officer was not satisfied and made an addition of ₹10,00,000 under section 69A of the Act.
Aggrieved assessee preferred an appeal before the ld. CIT-A.
Before the learned CIT(A), the assessee filed additional evidences under Rule 46A on 11.03.2020 and 29.01.2021. These included details of bank withdrawals, computation of income, gift from son, and supporting papers. The learned CIT(A), however, dismissed the appeal and confirmed the addition.
Being aggrieved by the order of learned that the CIT-A, the assessee is in appeal before us.
The ld. AR argued that the assessee had filed all necessary evidences before the ld. CIT(A). Pages 60–65 and 66–70 of the paper book show the details of withdrawals and sources of funds. The application under Rule 46A was also filed. The ld. CIT(A) ignored these .
Page 3 of 4 materials and dismissed the appeal. The assessee had discharged the onus to explain the source of deposit. Therefore, the addition is not sustainable.
On the other hand, the ld. DR supported the orders of the lower authorities. He argued that the assessee did not prove the claim with proper documents, and hence the addition was rightly made.
We have heard both sides and examined the record. The issue is whether the deposit of ₹10,00,000 in the bank account can be treated as unexplained money under section 69A of the Act in the given facts and circumstances.
9.1 It is seen that the assessee filed additional evidences before the learned CIT(A). These evidences show that the funds came from a gift of ₹9,00,000 from the assessee’s son, ₹65,000 savings from vegetable business, and ₹35,000 from sale of old gold. There were also bank withdrawals and construction payments which supported the explanation. These evidences are material and go to the root of the matter.
9.2 The learned CIT(A) should have considered these evidences or called for a remand report from the Assessing Officer. Ignoring them was against the principles of natural justice. Once the assessee filed an explanation with supporting papers, the onus shifted to the department to disprove the claim. No contrary material was brought on record by the Revenue.
Page 4 of 4 9.3 We also note that the assessee is a small trader, aged more than 70 years, and his returned income is below the basic exemption limit. In such a case, the entire cash deposit cannot be taxed as unexplained. The evidences clearly show that the deposit was from explained sources. Accordingly, we hold that the assessee has explained the source of cash deposit. The addition made under section 69A is not justified and cannot be sustained. In view of the above discussion, the addition of ₹10,00,000 made by the Assessing Officer and confirmed by the learned CIT(A) is deleted. Hence, the ground of appeal of the assessee is hereby allowed.
In the result, the appeal of the assessee is allowed.
Order pronounced in court on 3rd day of November, 2025