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Facts
The assessee appealed an order confirming the addition of Rs. 17.15 Lacs in cash deposits. The CIT(A) had accepted the source as earlier withdrawals and agricultural income but confirmed the addition because the assessee allegedly failed to explain the reasons for holding the cash.
Held
The Tribunal held that the assessee, being a senior citizen, was legally permitted to hold cash. The addition was confirmed on a wrong premise, and since the sources were accepted, the confirmed addition was deleted.
Key Issues
Whether the addition of cash deposits is justified when the source is accepted and the assessee, being a senior citizen, is legally permitted to hold such cash.
Sections Cited
143(3)
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Income Tax Appellate Tribunal, “B” BENCH, CHANDIGARH
Before: HON’BLE SHRI LALIET KUMAR, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
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 30-10-2024 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 23-12-2019. The sole grievance of the assessee is confirmation of addition of cash deposit for Rs.17.15 Lacs. The Ld. CIT(A), vide para 7.2 of the impugned order, after verifying the bank statement of the assessee, accepted the fact that the source of cash deposits was earlier withdrawal and agricultural income. But the addition has been confirmed merely on the ground that the assessee failed to fully explain the reasons for keeping such huge amount in cash over a long period of time. Considering the fact that the assessee was a senior citizen, Ld. CIT(A) granted allowance of Rs.10 Lacs and confirmed the remaining addition against which the assessee is in further appeal before us.
This is a clinching fact that sources of cash deposits have been accepted to be early withdrawals and agricultural income as earned by the assessee. The addition has been confirmed on wrong premise that the assessee failed to fully explain the reasons for keeping such huge amount in cash over a long period of time. We find that the assessee is a senior citizen. The law does not prohibit such possession / retention by the assessee. Therefore, there is no justification to partly confirm the addition. Accordingly, the addition as confirmed in the impugned order stand deleted. The Ld. AO is directed to re-compute the income of the assessee.
The appeal stand allowed. Order pronounced on 20-05-2025.