SUNNY MADIA,LUDHIANA vs. INCOME TAX OFFICER, WARD 7 (1), LUDHIANA

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ITA 1004/CHANDI/2024Status: DisposedITAT Chandigarh30 April 2025AY 2017-18Bench: SHRI SANJAY GARG (Judicial Member)1 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found that the assessee had sufficiently explained the sources of the cash deposits, citing the opening cash balance, withdrawals, and rental income. The AO's addition was therefore not justified.

What were the facts?

The assessee filed an appeal against the CIT(A)'s order confirming additions made by the AO. The AO treated cash deposits in the bank account as income from unexplained sources under Section 69A. The assessee explained the source of these deposits with reference to cash in hand, withdrawals, and rental income, especially in light of the demonetization scheme.

What were the issues?

Whether the cash deposits in the bank account were income from unexplained sources, or if their source was adequately explained by the assessee.

Which sections of the Income-tax Act were involved?

Section 69A

AI-generated summary — verify with the full judgment below

आदेश/Order

1.

The present appeal has been filed by the assessee against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, [in short referred to as CIT(A)] dated 09.08.2024 relating to A.Y. 2017-18.

2.

The assessee in this appeal has contested the action of the CIT(A) in confirming the addition made by the Assessing -2024 A.Y. 2017-18 2 Officer ( in short ‘the AO’) of Rs.20,12,835/- under Section 69A of the Income Tax Act by treating the cash deposits in the bank account as income from unexplained sources.

3.

At the outset, the ld. Counsel for the assessee has brought my attention to the impugned order of the CIT(A) wherein the Cash Flow Statement furnished by the assessee has been reproduced. The ld. counsel has drawn my attention to the opening balance i.e. cash in hand of Rs.89,850/- as on 01.04.2016. Further, the ld. counsel has drawn my attention to a withdrawal entry of Rs.8 lacs dated 29.09.2016. The ld. counsel has further demonstrated that the assessee during the period had also received rental income of about Rs.3.5 lacs. It has been explained that since the Demonetization Scheme was announced by the Government, therefore, the assessee had to deposit the entire cash in hand including out of withdrawals and rent receipts in the bank account during demonetization period.

The source of the deposits of Rs.20,12,835/-, therefore, has been duly explained by the assessee.

4.

The ld. DR could not rebut the aforesaid factual aspect on the file.

ITA No. 1004/Chd-2024 A.Y. 2017-18 3

5.

In view of this, I do not find justification on the part of the CIT(A) in confirming the impugned addition and the same is ordered to be deleted.

6.

In the result, appeal of the assessee stands allowed.

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