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Facts
The assessee, an elderly lady, deposited Rs. 19,00,000/- in her savings account during the demonetization period. She had previously withdrawn this amount to purchase agricultural land, but the deal fell through. The Assessing Officer added this amount as unexplained income, and the CIT(A) upheld this.
Held
The Tribunal held that the assessee had established that the deposited amount was from prior withdrawals and that the Assessing Officer and CIT(A) did not provide convincing reasons to reject this explanation. The addition made by the Assessing Officer was directed to be deleted.
Key Issues
Whether the deposit of Rs. 19,00,000/- during the demonetization period, which was explained as arising from prior withdrawals for a failed land purchase, can be added as unexplained income under Section 68 or 115BBE of the Income Tax Act.
Sections Cited
68, 115BBE, 253(3), 144, 69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW BENCH ‘SMC’, LUCKNOW
Before: SHRI ANADEE NATH MISSHRA
2017-18 against impugned appellate order dated 13/06/2024 (DIN & Order No. ITBA/NFAC/S/250/2024- 25/1065625604(1) of Commissioner of Income Tax (Appeals) [“CIT(A)” for short]. Grounds of appeal are as under:
“1. Because on the facts and in the circumstances of the case the order of Ld. CIT(A) is bad in law and deserves to be quashed being illegal.
Because, on the facts and in the circumstances of the case, the order of Ld. CIT is erred in law and on facts in adding an amount of Rs.19,00,000/- under section 68 of the Income Tax Act, 1961 being cash deposited during demonetization period without considering the fact that such cash deposits were made out of the past savings and withdrawals of the assessee and her husband.
Because, on the facts and in the circumstances of the case, the order of Ld. CIT is bad in law as the Assessing Officer has been added the addition of Rs.19,00,000/- disbelieving the facts narrated by the assessee.
Because, on the facts and in the circumstances of the case the order of Ld. CIT is bad in law as the Assessing Officer has been added the addition of Rs.19,00,000/- without considering the fact that the amount has been withdrawn by the assessee from the saving and then re - deposited hence, the action of the AO treating the same as unexplained is without any basis, contrary to the facts, misconceived, bad in law, the order passed treating it to be unexplained income u/s.115BBE be quashed.
Because no part of the said amount of Rs.19,00,000/- being undisclosed or unexplained, the AO has erred on facts and in law in treating the same as income u/s.ll5BBE and has thereby erred in taxing the same, the order passed is bad in law and be quashed.
Because the AO has failed to appreciate that the deposits in bank prior to withdrawals made have all been treated as explained; the AO does not dispute the same, neither the withdrawals made have been questioned, the fact of depositing the cash after the withdrawals has been merely doubted and disbelieved, which explanation of the assessee has neither been found to be false nor untrue, the treatment of cash deposited as unexplained u/s.115BBE is contrary to the provisions of law, the impugned order passed be quashed.
Because the entire order passed treating the deposit of Rs.19,00,000/- as unexplained u/s 115BBE, is based on conjectures, surmises and suspicion, without considering the explanations filed, is without jurisdiction, bad in law and be quashed.
Because there being no material nor formation of any belief with the AO-that the amount of Rs.19,00,000/- first withdrawn from savings bank and then re-deposited is unexplained the AO has erred in ignoring the submissions filed, the order passed by the AO treating the amount of Rs.19,00,000/- as income u/s.115BBE be quashed.
Because, on the facts and in the circumstances of the case, the CIT (A) has passed the order without providing the assessee with a due and proper opportunity of hearing therefore the impugned order deserves to be set-aside being bad in law.”
(B) This appeal has been filed by the assessee, beyond time limit prescribed under section 253(3) of IT Act. The assessee has submitted application, duly supported by affidavit, for condonation of delay in filing of the appeal; pleading that the delay was unintentional and beyond control of the assessee and has requested to admit the appeal for hearing. The learned Sr. Departmental Representative for Revenue did not express any objection to assessee’s application for condonation of delay in filing of the appeal. In view of the foregoing, and in specific facts and circumstances of the present appeal before us, the delay in filing of this appeal is condoned; and the appeal is admitted for hearing.
(C) The facts of the case, in brief, are that the assessee is an old lady aged about 80 years and had deposited Rs.19,00,000/- in her savings bank account maintained with AXIS Bank Ltd. on 18/11/2016. The assessee has not filed her return of income for the year under consideration. The Assessing Officer passed assessment order under section 144 of the I.T. Act on 01/10/2019 and determined the total income of the assessee at Rs.19,00,000/- and made the addition of Rs.19,00,000/- under section 69A of the I.T. Act. Being aggrieved, the assessee went in appeal before the learned CIT(A). The learned CIT(A), vide impugned appellate order dated 13/06/2024 has dismissed the appeal of the assessee. Now the assessee is in appeal before the Income Tax Appellate Tribunal.
(D) During the course of hearing learned A.R. for the assessee reiterated the submissions made before the learned CIT(A) and submitted that the said amount was withdrawn by the assessee from her savings bank account on 31/05/2016 and on 01/06/2016. The assessee had withdrawn the said amount to be paid towards title settlement of agricultural land purchased earlier. Since the deal could not materialize, the money was lying with the assessee which she deposited in her savings bank account. Learned A.R. for the assessee submitted that the money deposited by the assessee in bank is fully explained by earlier withdrawals. Learned D.R. supported the orders of the authorities below.
(E) Both sides have been heard. Materials on record have been perused. The submissions and contentions made by learned A.R. for the assessee are convincing. The assessee has established that money deposited by the assessee in her savings bank account was out of withdrawal made by the assessee from bank. The Assessing Officer and learned CIT(A) have not accepted this explanation of the assessee without stating convincing reasons. Therefore, the Assessing Officer is directed to delete the addition. All the grounds of appeal are treated as disposed of in accordance with aforesaid direction.
(F) In the result, the appeal is allowed.
(Order pronounced in the open court on 25/11/2025)