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Facts
The assessee deposited Rs. 12,91,000 during the demonetization period. The Assessing Officer made an addition under section 69A of the Act, which was confirmed by the CIT(A).
Held
The Tribunal held that the assessee had provided credible evidence, including agricultural income and a confirmation email from her brother, to substantiate the source of the cash deposits. Therefore, the addition made by the AO and sustained by the CIT(A) could not be upheld.
Key Issues
Whether the cash deposits made during the demonetization period were sufficiently explained by the assessee, and whether the addition under section 69A was justified.
Sections Cited
144, 69A, 143(3)
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Income Tax Appellate Tribunal, HYDERABAD BENCHES “B”, HYDERABAD
Before: SHRI K.NARASIMHA CHARYT & SHRI MADHUSUDAN SAWDIA
(निर्धारण वर्ा / Assessment Year: 2017-18) Swarnalatha Police Income Tax Officer Hyderabad Vs. Ward-4(3) [PAN : ALNPP2141H] Hyderabad अपीलधर्थी / Appellant प्रत्यर्थी / Respondent निर्धाररतीद्वधरध/Assessee by: Shri Sashank Dundu, AR रधजस्वद्वधरध/Revenue by: Shri Ashutosh Pradhan, DR सुिवधईकीतधरीख/Date of hearing: 20/02/2025 घोर्णध कीतधरीख/Pronouncement on: 12/03/2025 आदेश / ORDER PER K. NARASIMHA CHARY, J.M: Aggrieved by the order dated 23/7/2024 passed by the learned Commissioner of Income Tax (Appeals) (“learned CIT(A)”), Mumbai in the case of Swarnalatha Police (“the assessee”), assessee preferred this appeal.
Brief facts of the case are that the assessment in the case of the assessee was completed and assessment order under section 144 of the Income Tax Act, 1961 (in short “the Act”) dated 29/11/2019 was passed, by making an addition of cash deposits of Rs.12,91,000/- made during demonetization period, as unexplained money under section 69A of the Act, against which, assessee preferred an appeal before the learned CIT(A). Learned CIT(A) confirmed the addition made by the learned Assessing Officer by holding that the assessee has not satisfactorily explained the nature and source of cash deposits.
Aggrieved by the order of the learned CIT(A), assessee preferred an appeal before the Tribunal and at the outset, learned AR contended that the assessee earns annual income of around Rs.2 lakhs from the agricultural land owned by her to the extent of Rs.11.19 acres and also derives income from house property. Assessee also conducts tuition classes for young students and earns tuition fee. Assessee’s brother is a doctor by profession, resident of California and whenever he visits India, he invariably stays with the assessee and at the end of the trip leaves unspent Indian currency with the assessee as a token of love and affection. Assessee offered her income to tax every year and filed her returns of income regularly. Since the assessee’s husband takes care of the family needs there was hardly any expenditure incurred by the assessee out of the income earned by her. During demonetization period she had to deposit the cash available with her in specified bank notes in her bank account.
Learned AR further contended that the learned CIT(A) erred in upholding the addition made by the learned AO without appreciating the fact that the assessee has valid sources for the cash deposits made during the demonetization period and also ignored the fact that the assessee declared agricultural income in the returns of income filed in the previous years. He further contended that even the assessee’s brother was not cross examined by the learned CIT(A) or remanded the matter to the learned Assessing Officer for examination of her brother to verify the correctness of the claim. He, therefore, prayed to set aside the order passed by the learned CIT(A) and delete the addition made by the learned AO.
Per contra, the learned DR relied on the orders of the authorities below and submitted that in spite of granting ample opportunities the assessee failed to furnish any material to substantiate her grounds pertaining to the cash deposits made in her bank account. He, therefore, pleaded to uphold the order of the Ld.CIT(A) and dismiss the appeal filed by the assessee.
We have heard the rival submissions and perused the material on record in light of various evidences filed by the assessee. It is undisputed fact that the assessee made cash deposits of Rs.12,91,000/- during the demonetization period. We have also gone through the income tax returns filed by the assessee and find that the assessee had declared agricultural income as well as the earnings from her tuition fee in the previous years in the returns of income filed. The assessee had also proved the onus of proof of gift amount received from her brother by way of confirmation email from him and discharged her liability of ownership of the cash deposited with credible evidences. Hence, addition made by the learned AO and sustained by the learned CIT(A) under section 69A of the Act cannot be upheld. We are, therefore, inclined to set aside the order of the learned CIT(A) and direct the learned Assessing Officer to delete the addition made. Accordingly, the appeal filed by the assessee is allowed.
In the result, appeal filed by the assessee is allowed.
Order pronounced in the open court on this the 12th March, 2025.