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Facts
The assessee challenged an addition of Rs.3,99,000/- confirmed by the CIT(A) for AY 2017-18. The AO had made a total addition of Rs.29,99,000/- for unexplained cash deposits, out of which Rs.26,00,000/- was deleted by the CIT(A).
Held
The Tribunal held that the amount of Rs.3,99,000/- deposited during demonetization could represent past savings, and it is difficult to track yearly savings precisely. Therefore, the assessee's explanation ought to have been accepted.
Key Issues
Whether the amount of Rs.3,99,000/- deposited during demonetization, which was confirmed by the CIT(A), could be treated as unexplained income.
Sections Cited
147
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DIVISION BENCH, ‘B’ CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI KRINWANT SAHAY
Assessee by : Shri Ajay Jain, CA Revenue by : Dr. Ranjit Kaur, Addl.CIT, Sr.DR Date of Hearing : 13.01.2025 Date of Pronouncement : 15.01.2025 PHYSICAL HEARING O R D E R PER RAJ PAL YADAV, VP The assessee is aggrieved with the order of the Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 20.09.2023 passed for assessment year 2017-18. The solitary grievance of the assessee is that ld. CIT(A) has erred in confirming the addition of Rs.3,99,000/-.
With the assistance of ld. Representative, we have gone through the record carefully. On a perusal of the record, we find that AO has made a total addition of Rs.29,99,000/- on account of A.Y.2017-18 2 unexplained cash deposit in the bank. On appeal, the ld. CIT(A) has deleted an addition of Rs.26,00,000/- on the ground that one Shri Paramveer Singh has given a loan of Rs.26,00,000/- to the assessee.
The credit worthiness of this amount is not in doubt, hence, ld. CIT(A) has deleted the addition. However, a sum of Rs.3,99,000/- was confirmed by the ld. CIT(A) because this amount was deposited during demonetization. We find that a small amount of Rs.3,99,000/- could represent past savings because all of a sudden, the currency notes of 1000 and 500 were discontinued, therefore, under compulsion savings available with the family had to be deposited in the account. It is very difficult in day today life to have a track of yearly savings and for what purpose the amount was kept by a human being. Therefore, to this extent, the explanation of the assessee ought to have been accepted by the Revenue Authorities. We allow this appeal and delete the addition.
In the result, appeal is allowed.