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

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.

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/-.

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 In response, the assessee has submitted that a sum of Rs.10,00,000/- was withdrawn from the partnership firm to meet out medical treatment expenses for his mother.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/-.

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.

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

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 Addl CIT(A) has not accepted assessee’s explanation of past savings as he has withdrawn Rs.10,00,000/- in the month of November 2016.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 AR has explained that money was withdrawn for treatment of his mother, which was deposited back as mother expired on 17th November 2016 before treatment.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.

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