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Facts
The assessee deposited Rs. 54,50,000/- in her bank account during the demonetization period. The assessee contended that the cash was withdrawn earlier for her mother's medical treatment and unutilized portion was redeposited. The Assessing Officer and CIT(A) rejected this explanation for lack of documentary evidence.
Held
The Tribunal held that the assessee had withdrawn a substantially larger amount of cash (Rs. 1,12,46,500/-) prior to the demonetization period, and the department failed to show that this cash was utilized for other purposes. Therefore, the source of the cash deposits was explained.
Key Issues
Whether the cash deposits made during the demonetization period were adequately explained by prior cash withdrawals, and if the department's addition on account of unexplained money was justified.
Sections Cited
69A, 143(3), 115BBE, 271AAC
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Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD
Before: SMT. ANNAPURNA GUPTA & SHRI SIDDHARTHA NAUTIYAL
(Assessment Year: 2017-18) Kiranlata Agamprasad Agarwal, Vs. Income Tax Officer, C/o. Divyang Shah & Co., Ward-5(3)(4), Chartered Accountants, Ahmedabad 201, 2nd Floor, Devashish Complex, Nr. Regenta, Central Antarim Hotel, Off. C.G. Road, Ahmedabad-380006 [PAN No.AARPA2975M] (Appellant) .. (Respondent) Appellant by : Shri Divyand Shah, A.R. Respondent by: Shri Hargovind Singh, Sr. DR Date of Hearing 11.06.2025 Date of Pronouncement 18.06.2025 O R D E R
PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:
This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 26.03.2025 passed for A.Y. 2017-18.
The Assessee has taken the following grounds of appeal:-
“1. Whether, on facts and in circumstances of the case and in law, Ld. CIT(A) erred in confirming the addition for Cash deposit of Rs.54,50,000/- as unexplained money u/s. 69A of the act.? 2. Whether on facts and in circumstances of the case and in law, Ld. AO has erred in making assessment u/s. 143(3) of the act? Further, appellant craves leave to add, amend, alter or withdraw all or any ground of appeal
.”
3. The brief facts of the case are that the assessee filed return of income, declaring total income of Rs. 93,49,550/-. As per data available Kiranlata Agamprasad Agarwal vs. ITO Asst. Year –2017-18 - 2– with the Assessing Officer, he observed that assessee had deposited cash of RS. 54,50,000/- in her bank account maintained with Indian Overseas Bank, Mumbai during the period of demonetization from 09.11.2016 to 13.12.2016. During the course of assessment proceedings, the assessee submitted that the cash deposits amounting to Rs. 54,50,000/- during the demonetization period had been made out of cash withdrawals made by the assessee during the impugned assessment year. The Counsel for the assessee produced a chart / table before the Assessing Officer stating that the assessee had withdrawn cash amounting to Rs. 56,46,500/- during the period 13.04.2016 to 01.10.2016 and the same was redeposited by the assessee in the same bank account during the demonetization period. The assessee contended that the mother of the assessee was admitted in Apollo Hospital, Hyderabad for her treatment due to old age and it was for this purpose that the assessee had earlier withdrawn cash. However, the unutilized portion of the cash which was withdrawn, was later redeposited by the into the same bank account during the demonetization period. Accordingly, the assessee submitted that the entire deposits made in cash by the assessee during the demonetization period had been fully explained. However, the Assessing Officer did not agree with the submissions made by the assessee and added the entire amount of deposits made by the assessee in his bank account with the following observations:
“6.1 The assessee contended that his mother was admitted in the Apollo Hospital, Hyderabad for her treatment and due to her old age assessee's mother also expired at Apollow Hospital Hyderabad on 22.02.2017. She further stated that this was also one of the reason for having requirement of cash on hand. The assessee has not submitted any supporting documentary evidence with regard cash expenses for medical treatment for her mother, cash expenses in travelling to Australia etc. Therefore, the contention of the assessee is not acceptable. The reason stated in her reply is in general nature, not justifiable and tenable. The assessee has not provided any supplying documents in support of her claim.
7. Considering the above facts and elaborate discussion held in the preceding paragraphs, it is confirmed that the assessee could not explain and Kiranlata Agamprasad Agarwal vs. ITO Asst. Year –2017-18 - 3– establish the sources and nature of the cash deposit aggregating to Rs. 54,50,000/- deposited in her bank account. Further, the assessee could not offer any satisfactory explanation about the nature and source of these deposits, hence the total value of cash deposits of Rs.54,50,000/- is deemed as unexplained money u/s.69A of the Act are added for taxation at the rate of 60% as provided u/s. 115BBE of the Act. Further, penalty proceedings u/s. 271AAC of the Act in respect of said unexplained income initiated on this is issue separately.”
In appeal, Ld. CIT(A) confirmed the additions with the following observations:
“4.1 The A.O has briefly pointed out that the assessee's mother was admitted in the Apollo Hospital, Hyderabad for her treatment and due to her old age assessee's mother also expired at Apollo Hospital Hyderabad on 22.02.2017. She further stated that this was also one of the reason for having requirement of cash on hand. The assessee has not submitted any supporting documentary evidence with regard cash expenses for medical treatment for her mother, cash expenses in travelling to Australia etc. Therefore, the contention of the assessee is not acceptable. The reason stated in her reply is in general nature, not justifiable and tenable. The assessee has not provided any supporting documents in support of her claim. 4.2 In the appellate proceedings the Assessee has only submitted the copy of passport and copy of death certificate of assessee's mother but evidences as asked by the A.O during the assessment proceedings were not provided in the appellate proceedings. Hence, reasons as given by the assessee holding huge cash with her are not supported by any documentary evidence. 4.3 In absence of any substantial documentary evidence in support of its grounds of appeal
, I have no basis to take a contrary view in the appellate proceedings as I have no reason to interfere with the assessment order. As such, I do not find any infirmity in the order of Assessing Officer. Therefore, Addition of Rs. 54,500,000/- is hereby sustained on merits. Accordingly, Grounds No.1 and 2 are dismissed.
5. In the result, the appeal is Dismissed.”
5. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(A), confirming the addition made by the Assessing Officer. Before us, the Counsel for the assessee submitted that the assessee had made total withdrawals amounting to Rs. 56,46,500/- from the same bank account during the impugned assessment year under consideration from 13.04.2016 to 01.10.2016. Further, the Counsel for the assessee also submitted that on perusal of the bank statement of Indian Kiranlata Agamprasad Agarwal vs. ITO Asst. Year –2017-18 - 4– Overseas Bank, it may be seen that during the period 25.01.2016 to 01.10.2016, the assessee had made total cash withdrawals amounting to Rs. 1,12,46,500/-. The purpose of such cash withdrawal was for meeting the expenses towards the medical treatment of her ailing mother and out of the said cash withdrawals of Rs. 1,12,46,500/- made by the assessee before the demonetization period, the unutilized portion of the cash was again redeposited by the assessee in the same bank account during the demonetization period. The Counsel for the assessee submitted a table stating that since cash withdrawals from the same bank account (Rs. 1,12,46,500/-) substantially exceeded the cash deposits made by the assessee in the same bank account during the demonetization period (54,50,000/-), therefore, the source of cash deposits had been fully explained by the assessee. Further, the Counsel for the assessee also submitted that the Department has not pointed out to any particular expenditure which had been incurred by the assessee, as a result of which said cash which was withdrawn by the assessee, was not available with the assessee for being redeposited in the same bank account. Accordingly, the Counsel for the assessee submitted that the source of cash deposit had been fully explained and accordingly, no addition was called for, looking into the assessee’s particular set of facts.
6. In response, Ld. D.R. placed reliance on the observations made by the Assessing Officer and Ld. CIT(A), in their respective orders.
We have heard the rival contentions and perused the material on record.
Kiranlata Agamprasad Agarwal vs. ITO Asst. Year –2017-18 - 5– 8. It would be useful to reproduce the table of cash withdrawals and deposits made by the assessee from the said bank account during the period January 2016 to December 2016:
Table 3 - Cash withdrawals & deposits from Jan 2016 Date Cheque Narration Cash Cash Cash on No. withdrawal deposit hand 25.01.2016 305649 Self 15,00,000 - 15,00,000 27.01.2016 305650 Self 15,00,000 - 30,00,000 04.02.2016 305651 Self 1,00,000 - 31,00,000 12.02.2016 305652 Self 25,00,000 - 56,00,000 13.04.2016 305653 Self 25,00,000 - 81,00,000 03.08.2016 305654 Self 10,00,000 - 91,00,000 26.08.2016 305655 Self 15,00,000 - 1,06,00,000 26.09.2016 305656 Self 1,00,000 - 1,07,00,000 01.10.2016 305657 Self 5,46,500 - 1,12,46,500 05.12.2016 - By cash - 24,63,000 87,83,500 06.12.2016 - By cash 37,000 87,46,500 08.12.2016 - By cash - 28,50,000 58,96,500 08.12.2016 - By cash - 1,00,000 57,96,500 Total 1,12,46,500 54,50,000
On perusal of the table submitted by the Counsel for the assessee, it is evident that the assessee had withdrawn a sum of Rs. 1,12,46,500/- from it’s bank account held with Indian Overseas Bank from January 2016 and had redeposited a sum of Rs. 54,50,000/- in the same bank account, during the demonetization period. However, we observe that the Department has not pointed out to any specific circumstance / any specific expenditure which was incurred by the assessee to show that the cash so withdrawn by the assessee was not available with the assessee for redeposit during the demonetization period. In the case of Sudhirbhai Pravinkant Thaker vs. ITO, Ward-5(1), Ahmedabad 88 taxmann.com 382 (Ahmedabad – Trib.), the ITAT Ahmedabad Bench held that when assessee had demonstrated that he had withdrawn cash from bank and Kiranlata Agamprasad Agarwal vs. ITO Asst. Year –2017-18 - 6– there was no finding by authorities below that this cash available with assessee was invested or utilized for any other purpose, it was not open to Authority to make addition on basis that assessee failed to explain source of deposits in favour of assessee. Again in the case of ACIT vs. Baldev Raj Charla 121 TTJ 366 (Delhi), the ITAT Delhi Bench held that where there were sufficient cash withdrawals to cover cash deposits in question, merely because there was time gap between withdrawal of cash and cash deposits, explanation of assessee could not be rejected and addition on account of cash deposit could not be made.
Accordingly, looking into the instant facts, and the judicial precedents on the subject, we are of the considered view that the assessee has been able to explain the source of cash deposits made by the assessee in the aforesaid bank account during the demonetization period.
In the result, the appeal of the assessee is allowed. This Order pronounced in Open Court on 18/06/2025
Sd/- Sd/- (ANNAPURNA GUPTA) (SIDDHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 18/06/2025 TANMAY, Sr. PS TRUE COPY 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)- िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,