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Facts
The assessee filed a return for AY 2017-18, and his case was selected for scrutiny due to a cash deposit of Rs.11,00,000 during the demonetization period. The Assessing Officer treated this deposit as unexplained income under Section 69A due to a lack of explanation from the assessee. The CIT(A) confirmed the addition, citing non-compliance and insufficient supporting documents.
Held
The Tribunal found that the assessee had sufficiently explained the sources of the cash deposit, including Rs.8,00,000 from cash withdrawals for his daughter's marriage, Rs.89,100 from cash rent received, and Rs.2,10,900 from personal savings. After reviewing bank statements and considering the circumstances, the Tribunal concluded that no addition under Section 69A was warranted.
Key Issues
Whether the addition of Rs.11,00,000 as unexplained cash deposit under Section 69A was justified, given the assessee's explanation of its sources. Also, the applicability of Section 115BBE for Assessment Year 2017-18.
Sections Cited
250, 143(1), 143(2), 69A, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER Laxmanbhai Danumal Bhimani, The Income Tax Officer, Vs. EL-2, Surmaya Seven, Shilaj Ward 4, Nandoli Road, Nandoli, Kalol, Mehsana. Gandhinagar-382115 [PAN : AEBPB 5611 F] (Appellant) .. (Respondent) Appellant by : Shri Jimi Patel, AR Respondent by: Shri Rajenkumar M. Vasavda, Sr DR Date of Hearing 12.08.2025 Date of Pronouncement 30.09.2025 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-
Delay Condoned This appeal has been filed by the Assessee against the order dated 04.09.2024 passed by the Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [‘Ld. CIT(A)’ for short], under Section 250 of the Income-tax Act, 1961 [‘the Act’ for short], relating to the Assessment Year 2017-18. 2. The assessee has raised the following grounds of appeal:
01. The Ld. CIT(A) erred in law and on facts in confirming disallowance of Rs.11,00,000/- being alleged unexplained cash deposit u/s 69A of the Act without appreciating facts and law of the case properly.
2. Without prejudice to above, Ld. Assessing Officer erred in law and facts in taxing the income for which addition has been made at Laxmanbhai Danumal Bhimani Vs. ITO Asst. Year : 2017-18 special rate mentioned in Section 115BBE of the Act without appreciating that amendment made in Section 115BBE will be applicable from AY 2018-19 onwards and not application for AY 2017-18 which is assessment year under question.”
In this case, the return of income was filed by the assessee on 21.06.2017 declaring total income of Rs.2,96,860/-. The return was processed u/s 143(1) of the Act. The case of the assessee was selected for Limited Scrutiny through CASS, to examine/verify the cash deposit during demonetization period amounting to Rs.11,00,000/-. Since the assessee was neither replied nor submitted any explanation regarding the source of cash deposits before the Assessing Officer, the Assessing Officer treated the same as unexplained income of the assessee u/s 69A of the Act.
Aggrieved by the order of the Assessing Officer, the assessee filed appeal before the Ld. CIT(A). However, the Ld. CIT(A), noting non- compliance and lack of supporting documents, confirmed the addition made by the Assessing Officer and dismissed the appeal.
Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal.
At the outset, it was submitted that the assessee had responded to the notice issued u/s 143(2) of the Act and also to the notices issued u/s 143(1) on 09.04.2019 and 12.10.2019. The assessee submitted that he has filed reply to the show-cause issued and submitted bank statements and return of income for previous two years which the Revenue Authorities ignored. Before us, the Ld. AR submitted that the assessee Laxmanbhai Danumal Bhimani Vs. ITO Asst. Year : 2017-18 had made cash deposits of Rs.11,00,000/- on 21.11.2016 in Cosmos Bank account and the source of which are cash withdrawal of Rs.8,00,000/- for the marriage function of daughter, Rs. 89,100/- towards the rent received in cash and Rs.2,10,900/- out of personal savings. We have gone through the bank statements, withdrawals made and considered the factum of marriage in the family. Since the withdrawals are not in dispute and personal savings to the tune of Rs.2,10,900/- can be considered as normal, we hold that no addition u/s 69A of the Act is called for.
In the result, the appeal of the assessee is allowed.