SRI P SURYANARYANAN,COIMBATORE vs. ITO, NCW-1(4), COIMBATORE

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ITA 152/CHNY/2025Status: DisposedITAT Chennai18 March 2025AY 2017-184 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee's explanation of past savings of Rs. 3,00,000 is acceptable. The Tribunal noted that the assessee is a senior citizen and has been filing regular income tax returns. While the Ld. Addl. CIT(A) had not accepted the assessee's explanation of past savings for the entire amount withdrawn (Rs. 10,00,000 in November 2016), the Tribunal found the specific amount of Rs. 3,00,000 to be acceptable as past savings. The reasoning was based on the assessee's status as a senior citizen and consistent return filing. Consequently, the addition of Rs. 3,00,000 confirmed by the Ld. Addl. CIT(A) was deleted. The appeal filed by the assessee was allowed.

What were the facts?

The assessee, Sri P. Suryanarayanan, an individual, filed an appeal against the order of the Addl. CIT(A) for Assessment Year 2017-18. The appeal challenged the confirmation of an addition of Rs. 3,00,000 out of an initial addition of Rs. 5,00,000 made by the Assessing Officer (AO). The AO had made this addition under Section 69A of the Income-tax Act, 1961, concerning unexplained cash deposits of Specified Bank Notes (SBNs) amounting to Rs. 13,35,000 during the demonetization period. The assessee's explanation that Rs. 10,00,000 was withdrawn from a partnership firm for his mother's medical treatment, and the unspent amount was re-deposited after her passing, was not fully accepted. The AO added Rs. 5,00,000, and the Addl. CIT(A) sustained Rs. 3,00,000.

What were the issues?

1. Whether the addition of Rs. 3,00,000, confirmed by the Addl. CIT(A) as unexplained money under Section 69A of the Income-tax Act, 1961, is sustainable, considering the assessee's explanation of past savings. Assessee's Contentions: The Ld. A.R. argued that the Rs. 3,00,000 confirmed by the Addl. CIT(A) represented past savings of the assessee, who is a senior citizen and has been filing regular income tax returns. The total income declared for the year was Rs. 5,65,200, supporting the explanation of past savings. Revenue's Contentions: The Ld. Departmental Representative relied on the orders of the authorities below.

Which sections of the Income-tax Act were involved?

Section 69A,Section 143(3),Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: SHRI ABY T. VARKEY & SHRI JAGADISH

Hearing: 18.03.2025Pronounced: 26.03.2025

आदेश / O R D E R

PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2017-18 arises out of the order of Learned Commissioner of Income Tax, Appeal, Addl/JCIT(1)-1, Chandigarh [hereinafter “Addl. CIT(A)”] dated 17.12.2024 in the matter of assessment framed by the Assessing Officer [AO] u/s. 143(3) of the Income-tax Act,1961 (hereinafter “the Act”) on 13.12.2019.

2.

The only effective ground is against confirming the addition of Rs.3,00,000 out of addition of Rs 5,00,000 made by the A.O in respect of cash deposit of SBN of Rs 13,35,000.

1.

3. The assessee is an individual, deriving income from house property, a partnership firm and other sources. The assessee filed return of income on 30.09.2017, declaring a total income of Rs.5,65,220/-.

1.

During the course of assessment proceedings, the A.O has noted that the assessee had deposited Specified Bank Notes (SBNs) amounting to Rs.13,35,000/- during demonetization period. The AO issued notice u/s 142(1) of the Act, directing assessee to furnish the sources of these cash deposits. In response, the assessee has submitted that a sum of Rs.10,00,000/- was withdrawn from the partnership firm to meet out medical treatment expenses for his mother. However, since his mother passed away before the commencement of treatment, the unspent amount was re-deposited into his bank account. The AO did not accept this explanation and passed an assessment order under section 143(3) of the Act, making an addition of Rs. 5,00,000/- as unexplained money under section 69A of the Act. Aggrieved, the assessee preferred an appeal before Ld. CIT(A). The Ld. CIT(A) partly allowed the appeal, sustaining an addition of Rs.3,00,000/- while granting relief of Rs.2,00,000/- from the total addition of Rs. 5,00,000/-.

3.

The Learned Authorized Representative (Ld. A.R) submitted that assessee is a senior citizen and Rs.3,00,000/- confirmed by the Ld. Addl. CIT is out of past saving. The Ld AR has contended that assessee has been filing regular return of income and this year also income shown is Rs 5,65,200, therefore assessee explanation of past saving should be accepted.

4.

The Ld. Departmental Representative has relied on the orders of the authorities below.

5.

We have heard the rival submissions, and perused the materials available on record. We find that the assessee is senior citizen and has been filling regular return of income. The Ld. Addl CIT(A) has not accepted assessee’s explanation of past savings as he has withdrawn Rs.10,00,000/- in the month of November 2016. The Ld Ld. AR has explained that money was withdrawn for treatment of his mother, which was deposited back as mother expired on 17th November 2016 before treatment. In our considered opinion, the assessee’s explanation of past saving of Rs 3,00,000/- is acceptable, therefore addition of Rs 3,00,000/- confirmed by Ld Addl. CIT(A) is deleted. In view of the above, the appeal filed by the assessee is allowed.

6.

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

Order pronounced on 26th March, 2025.

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