SIJU SANKARAN KUTTY,ERNAKULAM vs. INCOME TAX OFFICER, NON CORP WARD 2(3), ERRNAKUALM

Brief facts of the case are that the assessee is an individual. Return of income for the A.Y. 2017-18 was filed on 28/07/2017 declaring total income of Rs. 3,71,670/-. Against the said return of income, the assessment was completed by the ITO, Non-Corp, Ward-2(3), Kochi (for short, 'AO') at a total income of Rs. Siju Sankaran Kutty 24,47,670/- . While doing so, the AO brought to tax a sum of Rs. 20,76,000/- being cash deposits made during demonetization period in the bank account held with Union Bank of India as unexplained money of the assessee for failure in proving genuineness of the explanation of the assessee that the said cash deposits were out of money of Rs. 20,00,000/- borrowed from one Mr.Umesh Mohanan for purchase of property, but the same has not been materialized, therefore, the amount was deposited in the bank account. It is further submitted that the said cash was withdrawn from the bank account earlier.

Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO.

Being aggrieved, the assessee is in appeal before the Tribunal in the present appeal.

It is contended that the cash deposits were made out of cash withdrawal earlier from the same bank account and, therefore, no addition is warranted.

On the other hand, ld.DR submitted that there was no evidence of cash withdrawal earlier, therefore, it cannot be treated that the deposits are made out of earlier withdrawals, hence, the addition is required to be sustained.

The issue that arises for my consideration is whether Ld.CIT(A) was justified in confirming the addition of Rs.20,76,000/- cash deposits made during demonetization period in the Union Bank of India. It is the contention of the assessee that he borrowed money from one Mr. Umesh Mohanan of Rs.20,00,000/- for the purpose of purchase of property, however, the transaction was not materialized, hence, the amount withdrawn again re-deposited in the same bank account and repaid the said money to the said person. The explanation offered by the assessee is plausible one, however, it requires verification with the bank statement and, therefore, the matter is restored to the file of the AO for re-doing the assessment in accordance with law after affording reasonable opportunity of being heard to the assessee. Thus, this appeal filed by the assessee is allowed for statistical purposes.

In the result, the appeal filed by the assessee is allowed for statistical purposes