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Facts
The assessee made cash deposits of Rs. 24,55,030/- during the demonetization period. The assessee claimed the source was Rs. 25 lakhs withdrawn over time from NRE/NRO accounts of her children in the USA. The AO treated Rs. 19,55,030/- as unexplained money under Section 69A read with Section 115BBE, and the CIT(A) partly allowed the appeal, accepting 50% (Rs. 12,27,515/-) as explained.
Held
The Tribunal, noting bank statements showing debits of Rs. 13,00,000/- and Rs. 11,65,000/- and a confirmation from SBI for loans totaling Rs. 24,65,000/- availed by the assessee, found merit in the AR's arguments. It directed the AO to verify these loans and, if found correct, to treat the cash deposits as explained and make no addition.
Key Issues
Whether the assessee's explanation for the source of cash deposits made during the demonetization period, specifically from loans availed against fixed deposits supported by her sons, is acceptable under the Income Tax Act.
Sections Cited
142(1), 69A, 115BBE
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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI K.NARASIMHA CHARY & SHRI S. BALAKRISHNAN
आदेश / ORDER PER K. NARASIMHA CHARY, J.M: Aggrieved by the order dated 25/09/2023 passed by the learned Commissioner of Income Tax (Appeals), Na�onal Faceless Appeal Centre, Delhi (“Ld. CIT(A)”), in the case of Sarada Devi Tripuraneni (“the assessee”), assessee preferred this appeal. 2. Brief facts of the case are that the assessee made cash deposits to the extent of Rs. 24,55,030/- in her bank account, maintained with the State Bank of India (“SBI”), during demone�za�on period. Therea�er, in response to the no�ce issued by the Learned Assessing Officer (“learned AO”) U/s. 142(1) of the Income Tax Act, 1961, assessee filed her return of income of Rs. 2,49,788/-. On being asked with respect to the source of cash deposits of Rs. 24,55,030/-, the assessee submi�ed that the cash deposits were made out of the cash Rs. 25 lakhs withdrawn over a period of �me from the NRE/NRO and other bank accounts of her children who were se�led in USA. However, learned AO, a�er considering the submissions and explana�on of assessee, treated the cash deposits of Rs. 19,55,030/- as unexplained money U/s. 69A read with sec�on 115BBE of the Act.
Aggrieved, assessee preferred an appeal before the learned CIT(A). Learned CIT(A), a�er considering the submissions of the assessee and the material available before him, directed the learned AO to accept 50% of the cash deposits of Rs. 24,55,030/- which works out to Rs. 12,27,515/- as explained. Thus, the learned CIT(A) partly allowed the appeal of the assessee. Hence, the assessee is in appeal before us.
Learned Authorized Representa�ve (“learned AR”) submi�ed that assessee is financially supported by her two sons, who are residing in USA. Out of such funds received by the assessee, a�er using some por�on of the funds, converted the balance amount into Fixed Deposits (“FD”) in SBI and has received bank interest also. It was further submi�ed that assessee availed loan on such FDs with a view to purchase immovable property. Since the assessee’s proposal for purchase of property did not materialize, assessee has re-deposited the amounts into her bank accounts. Thus, learned AR submi�ed that since the assessee has properly explained the sources for the cash deposits, the addi�on made by the learned AO and partly sustained by the learned CIT(A) is unwarranted and not jus�fied.
Per contra, Learned Departmental Representa�ve (“learned DR”) vehemently relied upon the orders of the lower Authori�es.
The core issue involved in this appeal is whether the assessee’s explana�on with regard to the source of cash deposit made during the demone�za�on period is acceptable? On this issue, the conten�on of the learned AR is that the assessee is financially supported by her two sons, who are residing in USA. Out of such funds, the assessee made a substan�al por�on into FDs in SBI and availed loans. To substan�ate this conten�on, the learned AR filed a paper book containing the bank account statements of loan availed by the assessee and a confirma�on le�er from SBI, Guru Nanak Branch, Vijayawada as well as the affidavits from the assessee’s two sons who said to have been financially supported their mother, the assessee.
On a perusal of the bank statements, we find that the assessee’s bank accounts with SBI were debited with Rs. 13,00,000/- and Rs. 11,65,000/- on 05/05/2016. Further, we have also gone through the le�er dated 18/12/2019 issued by the Chief Manager, SBI Gurunanak Nagar Branch, Vijayawada confirming that the assessee has availed loans aggrega�ng to Rs. 24,65,000/-. Under these circumstances, we find merits in the arguments of the learned AR. Therefore, considering facts and circumstances of the case, we hereby direct the learned AO to verify the loans availed by the assessee which are the source for cash deposits made by the assessee and, if found correct, the learned AO will treat the cash deposits as explained and will not make any addi�on. It is ordered accordingly. 7. In the result, appeal of the assessee is allowed. Order pronounced in the open court on the 17th January, 2025.