KADHARMEERA AMJATH,MADURAI vs. DCIT NCC1, MADURAI

2 -: 2. The solitary issue raised is whether the First Appellate Authority is justified in confirming the addition made by the AO amounting to Rs.2,37,000/- as unexplained money u/s.69A of the Act.

Brief facts of the case are as follows: The assessee is an individual. For the assessment year 2017-18, the return of income was filed on 27.03.2018 declaring ‘nil’ income. The assessment was selected for limited scrutiny to verify the cash deposits made during the demonetization period. During the course of assessment proceedings, assessee was directed to explain the source of cash deposits made totaling to Rs.10,26,500/-. The assessee submitted her explanation that she and her husband was engaged in agricultural activity for the past 40 years and was having agricultural land of 6.3 acres. It was submitted that assessee’s husband was a cardiac patient requiring regular medical care and had accumulated the past savings / gifts from her children. It was submitted that during demonetization period, the entire cash in hand was deposited. The assessee had also given the cash flow statement from March, 2010 to March, 2017. The AO accepts that assessee and her family was having agricultural income and also the fact that assessee’s husband was 3 -: a cardiac patient who requires constant medical care. The AO after considering the cash flow statement did not accept the opening cash balance of Rs.2,37,000/- and added the same u/s.69A of the Act (accordingly the difference of Rs.7,89,500/- was treated as explained) vide assessment order dated 27.12.2019 passed u/s.143(3) of the Act.

Aggrieved by the assessment order, assessee filed appeal before the First Appellate Authority (FAA). The FAA confirmed the addition made by the AO.

Aggrieved by the order of the FAA, assessee has filed the present appeal before the Tribunal. The Ld.AR reiterated the submissions made before the Income-tax authorities.

The Ld.DR supported the orders of the AO and the FAA.

I have heard rival submissions and perused the material on record. Assessee and her husband are senior citizens. Assessee’s husband is a cardiac patient requiring regular medical care. It is also an admitted fact that assessee is the owner of agricultural land of 6.3 acres. Assessee has got grown up children who used 4 -: to give financial support to take care of the medical necessities of their father. The AO has disbelieved only the opening cash balance of Rs.2,37,000/- and accepted the inflow of cash during the relevant assessment year. It is only natural that family has past savings for the aforesaid amount of Rs.2,37,000/-. Accordingly, I hold the sum of Rs.2,37,000/- is out of past savings and opening cash balance is to be given due credit. Hence, addition made u/s.69A amounting to Rs.2,37,000/- is deleted.

In the result, the appeal filed by the assessee is allowed.