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Facts
The assessee deposited Rs. 10 lakhs cash during the demonetization period, claiming it originated from past withdrawals made for a house renovation plan that was later postponed. Both the Assessing Officer and the ld.CIT(A) rejected this explanation, citing the absence of recent withdrawals and evidence of substantial payments made by the assessee for real estate activities around the time of the alleged withdrawals.
Held
The Tribunal upheld the ld.CIT(A)'s order, confirming the addition of Rs. 10 lakhs under Section 69A for unexplained cash deposits. It found no infirmity in the lower authorities' decision, concluding that the assessee failed to provide a satisfactory explanation for the source of the cash.
Key Issues
1. Whether the addition of Rs. 10 lakhs under Section 69A for unexplained cash deposits during demonetization was justified. 2. Whether the assessee's explanation of past cash withdrawals for house renovation was satisfactory. 3. Condonation of delay in filing the appeal.
Sections Cited
250, 69A, 144
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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: SHRI SANJAY GARG
आदेश आदेश/O R D E R आदेश आदेश
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).
It was explained before the ld.CIT(A) that the assessee after his retirement from the government service on 30.10.2015 had planned to renovate ancestral house at Gopalpur. He, therefore, had withdrawn a cash of Rs.6.00 lakhs on 19.12.2015, Rs.5.00 lakhs on 29.12.2015, and Rs.4.10 lakhs on 30.12.2015. That due to reasons, as explained in the submissions of the assessee, the assessee dropped the plan to renovate the house and further planned to reconstruct the house after monsoon period. It was explained that the some of the cash withdrawn, was incurred for his mother’s treatment and remaining cash amount of Rs.10 lakhs, which was in old- demonetization currency notes was re-deposited on commencement
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.