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Facts
The assessee deposited Rs. 10,00,000/- in their savings bank account without filing a return. The AO reopened the assessment u/s 147, making an addition of Rs. 10,00,000/- when the assessee explained the source as cash withdrawn from a loan. The CIT(A) dismissed the appeal ex-parte.
Held
The Tribunal held that the explanation for the cash deposit, supported by documentary evidence showing withdrawal of Rs. 18 lakhs on 18.09.2009, was satisfactory and could not be rejected solely due to a time gap.
Key Issues
Whether the addition made by the AO on account of cash deposit is justified when the assessee has provided a satisfactory explanation supported by documentary evidence?
Sections Cited
147, 148, 144
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Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI
Before: SHRI SS VISWANETHRA RAVI & SHRI JAGADISH
आदेश / O R D E R
PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2010-11 arises out of the order of Learned Commissioner of Income Tax (NFAC), Delhi [hereinafter “CIT(A)”] dated 23.06.2023 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s. 144 r.w.s 147 of the Income-tax Act, 1961 (hereinafter “the Act”) dated 18.12.2017.
There is a delay of 606 days in filing the appeal by the assessee.
The assessee has filed condonation petition/affidavit stating the reasons for delay in filing the appeal. We have considered the petition/affidavit of delay in filing the appeal and satisfied that there was sufficient cause for not filing the appeal within the prescribed time limit. Hence, the delay is hereby condoned.
2. The assessee had deposited cash of Rs. 10,00,000/- in his savings bank account but had not filed return of income for the relevant assessment year. Consequently, the AO reopened the assessment by issuing a notice u/s 148 of the Act. The assessee explained that the source of the cash deposit was cash withdrawn on 18.09.2009 and deposited on 27.03.2010. However, the AO did not accept the explanation and made an addition of Rs. 10,00,000/-.
Aggrieved by the said addition, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) dismissed the appeal ex-parte due to non-compliance with the notices issued during the appellate proceedings.
The Learned Authorized Representative (AR) submitted that the assessee had passed away during the appellate proceedings, and therefore, his wife could not file the appeal or respond to the notices in time. The Ld. AR also submitted a copy of the bank account statement, which clearly shows cash withdrawal of Rs. 18 lakhs on 18.09.2009, thereby explaining the source of the cash deposit.
The Learned Departmental Representative (Ld. DR) relied on the orders of the lower authorities.
We have heard the rival submissions and perused the materials available on record. On perusal of the orders, we find that the AO made an addition of Rs.10,00,000/- on account of cash deposits, rejecting the assessee’s explanation that a loan of Rs. 18,99,850/- was taken from his nephew and withdrawn in cash on 18.09.2009. The AO disbelieved the explanation citing that there was a gap of over six months between the cash withdrawal and the cash deposit. We do not agree with the view of the AO and the Ld. CIT(A) that the amount withdrawn on 18.09.2009 could not have been kept in cash for such long duration and was the source of cash deposit without bringing any material that cash withdrawn has been used somewhere else. Once the source of cash is explained and supported by documentary evidence, such explanation cannot be rejected solely on the basis of time gap. In our view, the explanation offered by the assessee is satisfactory. Accordingly, we delete the addition made by the AO.
In the result, the appeal filed by the assessee is allowed.
Order pronounced on 30th day of June, 2025 at Chennai.