RAMCHANDRA SINGH RANA,GANDHINAGAR vs. THE INCOME TAX OFFICER, WARD-3, GANDHINAGAR

The above appeal has been preferred by the assessee against order passed by the Ld.Commissioner of Income- Tax(Appeals),ADDL/JCIT(A)-2, Ludhiana [hereinafter referred to as “ld.CIT(A)] dated 06.11.2024 under section 250 of the Income Tax Act, 1961 ("the Act" for short) for the assessment year 2017-18.

The assessee, in this appeal, is aggrieved by the action of the ld.CIT(A) in confirming addition made by the Assessing Officer (“AO” for short) of Rs.10.00 lakhs into the income of the assessee on account of unexplained cash deposits during the demonetization period.

The appeal of the assessee is time barred by 138 days. A separate application along with affidavit of the assessee has been filed for condonation of delay.

In this case, the AO found that the assessee had deposited an amount of Rs.10.00 lakhs during the demonetization period i.e. in the month of November, 2016. The assessee during the assessment proceedings explained that the aforesaid amount of Rs.10 lakhs was deposited out of the past withdrawals made by the assessee for the purpose of construction of house. That, however, since the assessee did not carry out the construction activity, and the same was postponed, therefore, the cash was re-deposited in the bank account. The ld.AO, however, found that there was no recent withdrawal from the date of deposits. He, therefore, rejected the aforesaid contentions of the assessee, and made the impugned addition of Rs.10 lakhs on account of unexplained cash deposits in the bank account of the assessee.

Being aggrieved by the above order of the AO, the assessee preferred appeal before the ld.CIT(A).

The ld.CIT(A), however, did not agree with the submissions of the assessee observing as under:

Being aggrieved of the said order of the ld.CIT(A), the assessee has come in appeal before us.

I have heard rival submissions and gone through the record. As reproduced above, the ld.CIT(A) has categorically noted that the cash withdrawn by the assessee, from time to time, which was almost one year prior to the deposit of the amount of Rs.10 lakhs in the bank account was apparently used by the assessee for the construction of house or purchase of property. The ld.CIT(A) has drawn a table showing the payment made by the assessee to builders and home decors etc. A perusal of which would show that the assessee had made substantial payment of Rs.20 lakhs to NCPL Buildcon etc. in the month of December, 2015. Therefore, the amount withdrawn of Rs.6.00 lakhs on 19.12.2015 cannot be said to be lying with the assessee even after one year of the withdrawal. Though, the assessee had withdrawn cash of Rs.10 lakhs in the month of December, 2015, however, further entries in the bank account showed that the assessee had made payment to builders/home decors etc. and even the assessee has transferred the amount of Rs.4.50 lakhs to his loan account on 14.6.2016, and under these circumstances, it cannot be said that the said amount of Rs.10 lakhs lying with the assessee for redeposit in the bank account in the month of November, 2016 was out of the past withdrawals. Therefore, I do not find any infirmity in the order of the ld.CIT(A) in dismissing the appeal of the assessee.

In the result, the appeal of the assessee stands dismissed. Order pronounced on 24th December, 2025.