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Facts
The assessee deposited Rs. 25,52,000/- in cash on November 10 and 15, 2016. The Assessing Officer rejected the explanation that these deposits originated from prior bank withdrawals and treated them as unexplained money. The CIT(A) confirmed the addition.
Held
The Tribunal held that the lower authorities erred in ignoring the availability of cash-in-hand from recorded withdrawals. The assessee had withdrawn a total of Rs. 32,50,000/- for a cousin's marriage, which took place shortly after the withdrawals. The demonetization announcement altered the utility of these cash holdings, making redeposit plausible.
Key Issues
Whether cash deposits made during demonetization, explained as originating from prior withdrawals for a family event, constitute unexplained money under Section 69A.
Sections Cited
69A, 234B, 234C, 234D
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आयकरअपीलीयअिधकरण,च"ीगढ़ "ायपीठ “बी” , च"ीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH HEARING THROUGH: PHYSICAL MODE "ी लिलत कुमार, "ाियक सद" एवं "ी मनोज कुमारअ"वाल, लेखा सद" BEFORE: SHRI. LALIET KUMAR, JM &SHRI. MANOJ KUMAR AGGARWAL, AM आयकरअपीलसं./ 2025 िनधा"रणवष" / Assessment Year : 2017-18 Nikhil Bector बनाम The DCIT 13-C, Sarabha Nagar, Circle-1 Ludhiana-141001 Ludhiana Punjab "ायी लेखासं./PAN NO: ALCPB3392D अपीलाथ"/Appellant ""थ"/Respondent िनधा"रती की ओरसे/Assessee by : Shri Ashish Aggarwal, C.A राज"की ओर से/ Revenue by : Dr. Ranjit Kaur, Addl. CIT, Sr. DR सुनवाई की तारीख/Date of Hearing : 23/12/2025 उदघोषणा की तारीख/Date of Pronouncement : 24/12/2025 आदेश/Order PER LALIET KUMAR, J.M:
This appeal by the Assessee is directed against the order of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 29/04/2024 for the Assessment Year 2017-18. 2. In the present appeal Assessee has raised the following grounds:
1. That the Ld. CIT(A), NFAC, has erred in deciding the appeal of the assessee without affording reasonable opportunity in as much as the assessee had requested for personal hearing through Video Conferencing (VC) which was not given. There by the order of Ld. CIT (A) is against the principle of natural justice and deserves to be quashed.
2. That the Ld. CIT(A), NFAC has erred in confirming the addition of a sum of Rs. 25,52,000/- under section 69A on account of cash deposited by the assessee out of cash in hand available ignoring the submissions made in respect of the said deposits.
3. That in any case the disallowance made is against the law and facts of the cases.
4. That the learned Assessing Officer has erred in charging interest u/s 234B, 234C and 234D of the Income Tax Act, 1961.
That the appellant craves to amend, alter, delete or supplement any ground of appeal before the appeal is finally heard and disposed off.
Briefly, the facts of the case are that the assessee filed a return of income on 01/08/2017. The case was selected for scrutiny to verify large cash deposits during the demonetization period. The Assessing Officer (AO) observed that the assessee deposited cash totaling Rs. 25,52,000/- on 10.11.2016 and 15.11.2016. The AO rejected the explanation that these deposits originated from prior bank withdrawals and treated the same as unexplained money.
(i) The assessee filed the appeal before the Ld. CIT(A), however, no relief has been granted to the assessee.
(ii) Now the assessee is in appeal before us. 4. The learned AR contended that the lower authorities erred in ignoring the availability of cash-in-hand from recorded withdrawals. The withdrawals made by the assessee during 2016 are summarized as follows:
Date of Withdrawal Amount (in Rs.) Purpose (as per Record) 04.05.2016 2,00,000/- Personal expenses 31.08.2016 2,00,000/- Personal expenses 02.09.2016 5,00,000/- Cousin's Marriage 09.09.2016 2,00,000/- Personal expenses 17.09.2016 5,00,000/- Cousin's Marriage 06.10.2016 7,00,000/- Cousin's Marriage 14.10.2016 2,50,000/- Cousin's Marriage 24.10.2016 2,00,000/- Personal expenses 28.10.2016 5,00,000/- Cousin's Marriage Total 32,50,000/-