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Facts
The Assessing Officer made an addition of Rs. 15,00,000 on account of cash deposits in the assessee's bank accounts. The assessee explained that these amounts were withdrawn for house construction which did not materialize, and hence were re-deposited. The withdrawals and subsequent re-deposits were supported by bank statements.
Held
The Tribunal held that the deposits were duly supported by corresponding withdrawals from the same bank accounts and the explanation provided by the assessee was satisfactory. Therefore, the addition made by the Assessing Officer could not be sustained.
Key Issues
Whether the re-deposition of withdrawn cash amounts, initially intended for house construction but not used as such, can be considered as unexplained cash credits and added to the income.
Sections Cited
143(3)
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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: DR. B.R.R. KUMAR, VICE-SHRI T R SENTHIL KUMAR
PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
This appeal is filed by the Assessee against the appellate order dated 17.07.2025 passed by the Commissioner of Income Tax (Appeals)National Faceless Appeal Centre, Delhi, relating to the Assessment Year 2017-18.
The assessee has raised the following grounds of appeal:
1. The learned CIT(A) has grievously erred in law, and on facts, in confirming the addition of Rs.15,00,000/- made in respect of cash deposited in appellant’s bank account.
2. That on facts and in law, the entire addition ought to have been deleted as prayed for.
The appellant craves leave to add, alter, amend any ground of appeal.
3. On perusal of the records, we find that the Assessing Officer made an addition of Rs.15,00,000 on account of cash deposits made by the assessee in three different bank accounts, as detailed below:
Sr.No. Name of Bank Amount(in Rs.) Date of Deposit 1. State Bank of India 5,00,000/- 16.11.2016 2. Axis Bank 7,00,000/- 14.11.2016 3. ICICI Bank 3,00,000/- 25.11.2016
The assessee furnished copies of bank statements showing that on 18.07.2016, withdrawals were made of Rs.5,00,000/-, Rs.7,00,000/-, and Rs.3,00,000/-, which were subsequently re- deposited in the respective bank accounts on 16.11.2016, 14.11.2016, and 25.11.2016. The Ld. Counsel for the assessee further explained that these withdrawals were made for the purpose of construction of a house. However, as the construction activity did not materialize, the withdrawn funds were re-deposited into the same bank accounts. On verification, we find that the deposits are duly supported by corresponding withdrawals from the same bank accounts. Considering these facts and the explanation of the assessee, we are of the view that the source of deposits stands satisfactorily explained. Hence, the addition made by the Assessing Officer of ₹15,00,000/- cannot be sustained.
The order is pronounced in the open Court on 13.11.2025.
S /- Sd/- Sd/- (T R SENTHIL KUMAR) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT (True Copy) Ahmedabad; Dated 13.11.2025 MV आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant ��थ� / The Respondent. 2. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy