ANJU SOOD,LUDHIANA vs. ITO W VI(1), LUDHIANA

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ITA 466/CHANDI/2025Status: DisposedITAT Chandigarh18 August 2025AY 2017-18Bench: SHRI LALIET KUMAR (Judicial Member), SHRI MANOJ KUMAR AGGARWAL (Accountant Member)3 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal acknowledged the assessee's history as a regular taxpayer with significant past income, making accumulation of savings plausible despite a time gap between withdrawals and deposits. To conclude the litigation, the Tribunal partially allowed the appeal, restricting the unexplained cash deposit addition to Rs. 1 Lacs and directing the AO to re-compute the income.

What were the facts?

The assessee, having declared an income of Rs. 5.20 Lacs for AY 2017-18, faced an addition of Rs. 11.50 Lacs by the AO for unexplained cash deposits, which the assessee claimed were from past savings and withdrawals. The AO and subsequently the CIT(A) rejected this explanation and confirmed the addition.

What were the issues?

Whether the addition for unexplained cash deposit, claimed by the assessee to be from past savings and withdrawals, should be confirmed, given the time gap and lack of evidence for idle cash.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, CHANDIGARH

Before: HON’BLE SHRI LALIET KUMAR, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

(िनधा�रण वष� / Assessment Year: 2017-18) Ms. Anju Sood ITO B4 6th Floor Cross Winds, Ward No V1(1), बनाम/ Vs. Near Lodhi Club, Underpass Area Ludhiana. Ferozepur Road, Ludhiana. �थायीलेखासं./जीआइआरसं./PAN/GIR No. AMSPS-3664-C (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Shri Sudhir Sehgal (CA) – Ld. AR ��थ�कीओरसे/Respondent by : Sh. Vivek Vardhan (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 05-08-2025 घोषणाकीतारीख /Date of Pronouncement : 18-08-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of an order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 25-03- 2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 19-12-2019. The sole grievance of the assessee is confirmation of addition of cash deposit for Rs.11.50 Lacs.

Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under.

2.

The assessee declared income of Rs.5.20 Lacs. During assessment proceedings, the assessee was required to explain the sources of cash deposit in bank account for Rs.11.50 lacs. The deposits were attributed to past savings and earlier withdrawals. However, Ld. AO rejected the explanation on the ground that the assessee failed to substantiate the fact that the cash was kept idle and not utilized for any other purposes. Accordingly, the deposit of Rs.11.50 Lacs was added to the income of the assessee. The Ld. CIT(A) confirmed the addition against which the assessee is in further appeal before us.

3.

It emerges that the assessee has declared income of Rs.5.20 Lacs which has been accepted by Ld. AO. The assessee is regular taxpayer since AY 2014-15 having returned income of more than Rs.6 Lacs in each of the years and therefore, accumulation of past savings could not, altogether, be ruled out. Though there is time gap between withdrawals and deposits, no other usage of idle cash has been identified. With a view to put an end to litigation, we partially accept assessee’s claim and direct Ld. AO to restrict the impugned additions to the extent of Rs.1 Lacs and re-compute the income of the assessee.

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