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Facts
The assessee deposited ₹ 9 lakh in her savings account during the demonetization period. She declared a total income of ₹ 11,860/- and agricultural income of ₹ 3,48,770/-, also claiming ownership of agricultural land. The Assessing Officer added ₹ 5,51,230/- as unexplained investment.
Held
The Tribunal observed that the assessee demonstrated engagement in housekeeping, cleaning, and babysitting, accumulating cash for her son's marriage and medical emergencies. The deposit was explained as savings from 40 years of work. The Tribunal noted that documentary evidence for such unorganized work is difficult to obtain and that a plausible explanation was provided.
Key Issues
Whether the deposit made by the assessee during demonetization, explained as savings from informal work, can be treated as unexplained investment.
Sections Cited
69, 115BBE
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Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SHRI NARENDER KUMAR CHOUDHRY
Captioned appeal by the assessee challenging the impugned order dated 24/07/2024, passed by the learned Commissioner of Income Tax (Appeals), Delhi, [for short “Ld. Commissioner”], for the assessment year 2017–18.
In the instant case, the assessee, during the demonetization period, has deposited ₹ 9 lakh, in her savings bank account maintained with Khamgaon Urban Co–operative Bank Ltd., Paratwada. The Assessee on dated 29/03/2018 had also filed her return of income for the assessment year under consideration declaring total income at ₹ 11,860/– and agricultural income of ₹
2 Anjali Devrao Sonar ITA no.128/Nag./2025 3,48,770/–. The Assessee also claimed to be owner of agricultural land admeasuring 0.81 ha. (approx. more than 2 acre) in her own name but as per Revenue failed to substantiate agricultural income in addition to the already declared income and therefore the Assessing Officer, by giving a partial relief to the extent of ₹ 3,48,770/– and by deducting the same from the total amount of ₹ 9 lakh/–, ultimately made the addition of ₹ 5,51,230/– under section 69 of the Act being unexplained investment and taxed the same as per the provisions of section 115BBE of the Act.
The Assessee at this stage, before us by producing relevant documents, has been able to establish having earned agricultural income in the preceding and subsequent years as well. As observed above, the assessee has filed her return of income for the year under consideration and had shown the respective agricultural income of ₹ 3,48,770/–. This Court is of the considered view that the claim of Assessee to the effect “that she had accumulated the earning from previous years and, therefore, in compliance to the directions of the Government of India during the demonetization period, deposited the said amount in bank account during the relevant period and, therefore, the amount of ₹ 5,51,230/– as deposited by the assessee which has been treated as unexplained investment, is unsustainable “, seems to be plausible.
The Co–ordinate Bench of the Tribunal, at Mumbai in Ms. Lena Purshotam Patel Vs Income Tax Officer {ITA No.5825/M/2024 decided on 24-03-2025} has also deleted the identical addition, wherein the assessee being a woman had deposited ₹ 10 lakh, in her savings bank account during the demonetization period. The Tribunal by analyzing the facts and 3 Anjali Devrao Sonar ITA no.128/Nag./2025 circumstances in totality, ultimately justified the deposit made by the Assessee, by observing and holding as under:– “_8. Heard the parties and perused the material available on record and given thoughtful considerations to the peculiar facts and circumstances of the case. Admittedly, the Assessee before the authorities below, has demonstrated that she was engaged in housekeeping work, cleaning work, baby sitting and care taker etc. and has accumulated the cash in anticipation of the marriage of her only son and for emergency medical conditions. The Assessee further claimed that she had also received some amount from her son. Further, after announcement of the demonetization, she had deposited the entire savings of her life/40 years of working/service kept in cash, in her bank accounts. However, still the Ld. Commissioner affirmed addition to the extent of Rs.5,63,000/- mainly on the reason that no explanation or documentary evidence has been submitted by the Assessee. 8.1 This Court is of the considered view that there can be hardly any documentary evidence for housekeeping work, cleaning work, babysitting etc., however, the Assessee still offered a plausible explanation for depositing the amounts in her bank accounts during demonetization period and therefore simply on the basis of non- providing the relevant documents, which are otherwise not feasible in un-organized work of housekeeping, cleaning, cooking, babysitting etc., the liability of addition cannot be fastened. Thus, on the aforesaid analyzations, this Court is inclined to delete the addition under consideration and consequently the same is deleted”
On the aforesaid consideration, the addition in hand is hereby deleted.
In the result, appeal filed by the assessee is allowed. Order pronounced in the open Court on 19/06/2025