SHEELA HOLABASAPPA MUDAREDDI,NARAYANPUR, DHARWAD vs. INCOME TAX OFFICER, WARD 1(1), NAVANAGAR, HUBBALLI
Income Tax Appellate Tribunal, ‘SMC’ BENCH, BANGALORE
Before: SHRI NARENDER KUMAR CHODHRY & SHRI WASEEM AHMEDAssessment Year: 2017-18
PER WASEEM AHMED, ACCOUNTANT MEMBER:
This is an appeal filed by the assessee against the order passed by the Addl/JCIT(A)-1, Gurugram vide order dated 29/03/2025 in DIN
No.ITBA/APL/S/250/2024-25/1075234426(1) for the assessment year
2017-18. 2. The issue in dispute is the addition of ₹3,00,000 sustained by the CIT(A) out of the total addition of ₹6,00,000 made by the Assessing
Officer.
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3. The assessee is an individual. She filed her return of income declaring only interest income of ₹15,200.00 only. During assessment, the AO found that the assessee deposited cash of ₹6,00,000 in her bank account during the demonetisation period. The assessee explained that there was a cash withdrawal of ₹5,70,000 earlier, which was redeposited. She also claimed agricultural income. The AO did not accept her explanation and treated the cash deposit as unexplained under section 69A of the Act.
The ld. CIT(A) partly allowed relief. He deleted ₹3,00,000 and confirmed the balance ₹3,00,000 as unexplained money under section 69A of the Act. Aggrieved, the assessee filed the present appeal.
The learned AR submitted that the entire deposit was explained. There was a cash withdrawal of ₹5,70,000 which was not shown to be used elsewhere. That cash was available for redeposit. Further, agricultural income was also there to support availability of cash. The assessee being an individual is entitled to a basic exemption limit of ₹2,50,000. So, no addition should have been made.
On the other hand, the learned DR supported the orders of the lower authorities.
We have heard both sides and considered the record. It is an admitted fact that cash of ₹5,70,000 was withdrawn by the assessee before demonetisation. There is no evidence on record that this withdrawn cash was spent elsewhere. In such situation, it is reasonable Page 3 of 3
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to hold that the same cash was available for redeposit. Therefore, the explanation of the assessee cannot be rejected.
1 Further, even if there is any doubt, the assessee is entitled to the benefit of basic exemption of ₹2,50,000 under the Act. Thus, the addition made by the AO and sustained by the CIT(A) cannot be justified. Hence, the entire addition sustained by the ld. CIT(A) is deleted. In view of the above, we allow the ground of appeal of the assessee.
In the result, the appeal of the assessee is allowed.
Order pronounced in court on 9th day of October, 2025 (NARENDER KUMAR CHODHRY)
Accountant Member
Bangalore
Dated, 9th October, 2025
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Copy to:
The Applicant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR, ITAT, Bangalore. 6. Guard file
By order
Asst.