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Facts
The assessee filed their return of income for AY 2017-18, admitting a total income of Rs.3,36,940. The case was selected for scrutiny. The Assessing Officer (AO) noted cash deposits of Rs.4,93,000 during the demonetization period and added this amount as unexplained income. The CIT(A) partially deleted the addition, sustaining Rs.4,93,000.
Held
The Tribunal held that the assessee had provided evidence of sufficient cash withdrawals from the same bank account prior to the deposits, which could explain the source of the deposited funds. Therefore, the addition sustained by the CIT(A) was deleted.
Key Issues
Whether the cash deposits made during the demonetization period were adequately explained by prior cash withdrawals from the same bank account.
Sections Cited
69A, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, HYDERABAD “B” BENCH : HYDERABAD
Before: SHRI VIJAY PAL RAO & SHRI MANJUNATHA G
ORDER PER MANJUNATHA G, A.M. : This appeal has been filed by the assessee against the order of the learned CIT(A)-12, Hyderabad, relating to the assessment year 2017-2018.
Brief facts of the case are that, the assessee filed his return of income for the assessment year 2017-2018 on 31.03.2018 by admitting total income of Rs.3,36,940/-. The case was selected for scrutiny under CASS to verify cash
2 ITA.No.1283/Hyd./2024 deposited into bank account during demonetization period. During the course of assessment proceedings, the Assessing Officer noted that the assessee has made cash deposit including credits into bank account of Rs.12,17,461/- and out of which, a sum of Rs.4,93,000/- was cash deposited during demonetization period. The Assessing Officer called- upon the assessee to explain the credits and also cash deposited into bank account. The assessee neither appeared nor filed any details. Therefore, the Assessing Officer based on the information available with him and also taking note of relevant credits in bank account including cash deposits, made addition of Rs.12,17,461/- u/sec.69A of the Income Tax Act, 1961 [in short “the Act”] as unexplained money and brought to tax under the provisions of sec.115BBE of the Act.
Being aggrieved, the assessee preferred an appeal before the learned CIT(A). Before the learned CIT(A), the assessee has filed relevant bank statements and also explained the source for cash deposited into bank account out of cash withdrawal from very same bank account on 3 ITA.No.1283/Hyd./2024 earlier occasions. The assessee has also explained that a sum of Rs.7,22,461/- was credited into the bank account out of education loan received from the bank. The learned CIT(A) after considering the relevant submissions of the assessee and also taking note of relevant bank statements, deleted addition to the extent of Rs.7,22,461/- towards credit in the form of education loan from bank. However, sustained addition to the extent of Rs.4,93,000/- towards cash deposited on the ground that assessee could not establish source for cash deposited out of withdrawals from the very same bank account on earlier occasions.
Aggrieved by the order of the learned CIT(A), the assessee is now in appeal before the Tribunal.
Learned Counsel for the Assessee referring to bank account statement held with State Bank of India [“SBI”] submitted that the assessee has withdrawn a sum of Rs.6,01,330/- and Rs.1,32,902 on 16.11.2016. Further, the assessee has made cash deposits on various dates including on 19.11.2016, 22.11.2016 and 28.12.2016 aggregating to Rs.4,93,000/-. If we consider the cash withdrawals and 4 ITA.No.1283/Hyd./2024 cash deposited, the cash withdrawn from the very same bank account is much higher than the amount of cash deposited on subsequent dates. Although, these evidences has been filed before the learned CIT(A) and also explained the source for cash deposited, but, the learned CIT(A) sustained the addition to the extent of Rs.4,93,000/- without any valid reason. Therefore, she submitted that the addition sustained by the learned CIT(A) should be deleted.
Dr. Sachin Kumar, Learned Sr. AR for the Revenue, on the other hand, supporting the order of the learned CIT(A) submitted that, if we going by the order of the learned CIT(A), he clearly records that assessee has not filed any evidence to substantiate his claim. Further, whether the assessee has filed relevant bank statement before the learned CIT(A) is not clear. Therefore, he submitted that there is no merit in the arguments of the assessee that source for cash deposited is out of cash withdrawal from the very same bank account and thus, the arguments of the assessee should be rejected and addition sustained by the learned CIT(A) should be upheld.
5 ITA.No.1283/Hyd./2024 7. We have heard both the parties, perused the material on record and the orders of the authorities below. There is no dispute with regard the amount of cash deposited into bank account on various dates during demonetization period. In fact, the Assessing Officer in the assessment order has admitted that assessee has made cash deposit of Rs.4,93,000/- on various dates during demonetization period. The assessee has explained the source for cash deposited into bank account during demonetization period, out of cash withdrawal from very same bank account on two occasions i.e., on 16.11.2016 of Rs.6,10,330/- and one more cash withdrawal on very same date for Rs.1,32,902/-. The total cash withdrawal from SBI on 16.11.2016 was at Rs.7,34,232/-, whereas the total cash deposited into bank account as considered by the Assessing Officer on various dates during demonetization period was Rs.4,93,000/-. If we consider the amount of cash deposited in light of cash withdrawals from the very same bank account, in our considered view, the assessee was having sufficient cash balance to explain the amount of cash
6 ITA.No.1283/Hyd./2024 deposited into bank account during demonetization period which is evident from the bank account statement of SBI, Suryapet Branch. The Assessing Officer and the learned CIT(A) without considering the relevant facts simply sustained the addition to the extent of Rs.4,93,000/- towards cash deposited into bank account during demonetization period. Thus, we set aside the order of the learned CIT(A) and direct the Assessing Officer to delete the addition of Rs.4,93,000/- towards cash deposited into bank account during demonetization period u/sec.69A r.w.s.115BBE of the Income Tax Act, 1961.
In the result, appeal of the assessee is allowed. 8.