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Facts
The assessee, a NRI, deposited Rs. 10,00,000/- in her bank account during the demonetisation period. The Assessing Officer made an addition of Rs. 8,31,500/- for cash deposit and Rs. 8,59,800/- for Long Term Capital Gain, taxing it under Section 115BBE. The CIT(A) partly allowed the appeal.
Held
The Tribunal held that the assessee, an elderly lady with medical needs, had explained the cash deposits through her pension income and sale of property. The lower authorities failed to consider this explanation.
Key Issues
Whether the cash deposits during demonetisation were unexplained and could be added to income under Section 69A and taxed under Section 115BBE, or if the assessee's explanation was sufficient.
Sections Cited
69A, 115BBE, 142(1)
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Income Tax Appellate Tribunal, AHMEDABAD “D” BENCH, AHMEDABAD
Before: SMT. ANNAPURNA GUPTA & Ms. SUCHITRA KAMBLE
PER SUCHITRA KAMBLE, JUDICIAL MEMBER:
This appeal is filed by the Assessee against order dated 29.09.2023, passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2017-18.
The assessee has raised the following grounds of appeal :-
“1. In law and in the facts and circumstances of the appellant's case, the Ld. CIT(A) erred in confirming addition of cash deposit in Bank account of Rs.7,85,000/- and alleged unexplained deposit of Rs.46,500/- totalling to Rs.8,31,500 u/s.69A of the Income Tax Act, 1961.
2. In law and facts and circumstances of the appellant's case, the Ld. CIT(A) erred in upholding action of Assessing Officer in computing demand pertaining to addition under Section 69A of the Act after applying provisions of Section 115BBE of the Act when such provisions of the Act are not on statute on the date of depositing cash in bank account. Accordingly, Ld. AO has erred in invoking the provisions of Section 115BBE as if it is in the stature w.e.f
The appellant craves leave to add, alter, amend and/or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal.”
3. Notice under Section 142(1) of the Income Tax Act, 1961 was issued on 09.03.2018 calling upon the assessee to prepare true and correct return of income in respect of which the assessee is assessable under the Income Tax Act, 1961 during the Assessment Year (A.Y.) 2017-18. The assessee was required to furnish the said return of income as per the conditions and manner prescribed in Rule 12 of the Income Tax Rules, 1962 on or before 31.03.2018, but the assessee failed to do so. During the online verification under “Operational Clean Money” carried by the Income Tax Department gathered a list of assesses who had deposited substantial cash in Bank account during demonetisation period and has not filed income tax return for the A.Y. 2017-18. The assessee deposited cash of Rs.10,00,000/- in her Bank account during the demonetisation period. The assessee is a NRI and her e-mail id. was not available with the Department but the assessee failed to comply with the notices and failed to furnish details despite giving statutory notices. The Assessing Officer further issued notice of which the assessee replied and submitted that she withdrew cash to meet her day-to-day house hold expenses and also that due to the medical exigencies in her family she required cash in hand and the deposit in the Bank account are in consonance with the withdrawal. After taking cognisance of the same, the Assessing Officer made addition under Section 69A of the Act thereby deeming the cash deposited in the account of Canara Bank as unexplained/undisclosed money and taxed the same under Section 115BBE of the Act @ 60% (addition of Rs.12,12,093/-). The Assessing Officer further observed that the assessee received sale consideration of Rs.35,00,000/- in respect of the properties sold which was purchased in the year 1978. Thus, the Assessing Officer also made addition of undisclosed Long Term Capital Gain at Rs.8,59,800/-.
Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee.
The Ld. AR submitted that the cash deposit in bank account was in respect of the assessee’s withdrawal prior to demonetisation as the assessee retired in 1989 from Town Planning Valuation Department and earns pension income of Rs.18,500/-per month. The assessee also sold her property in Narayannagar, Ahmedabad in September 2016 and purchased a property in 2016 for Rs.19,95,000/-. The assessee kept cash in hand for herself and her husband’s medicines and when she sold the furniture of old house in the year 2016 the same was also received in cash component. The Ld. AR further submitted that the assessee is a very old lady and already gone through heart attack on account of which two stents have been inserted and she is ailing from colostomy. Due to this, the assessee requires cash in hand but due to the demonetisation she has to deposit the said amount in the Bank account. The Ld. AR submitted that the Assessing Officer as well as the CIT(A) was not justified in confirming the addition of cash deposit in Bank account as the assessee has already explained the deposit of Rs.8,31,500/-. The Ld. AR further submitted that the assessee has also sold her property and, therefore, the entire cash was explained by the assessee.
The Ld. DR relied upon the Assessment Order and the order of the CIT(A). The Ld. DR further submitted that the assessee has not given any evidence and the Assessing Officer has rightly made the addition.
We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that the assessee is staying in USA alongwith her daughter who is a widow. The assessee received pension as she retired from Town Planning Valuation Department. The assessee being a patient with heart problem keeps the cash in hand for the medical emergencies and the cash in hand has been explained by the assessee through her pension details as well as the consideration of the property/flat sold at a particular period. Thus, the assessee has in detail explained the cash deposits which was totally ignored by the Assessing Officer as well as by the CIT(A). Hence, appeal of the assessee is allowed.
Order pronounced in the open Court on this 7th February, 2025.