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Facts
The assessee filed an appeal against the order of CIT(A)/NFAC for AY 2017-18, where cash deposits of Rs. 26.17 lakhs made during demonetization were treated as unexplained under section 69A read with section 115BBE of the Income-tax Act, 1961. This addition was initially made in the assessment order dated 25.12.2019 and upheld by the lower appellate authority.
Held
The Tribunal observed that the assessee had previously withdrawn a total of Rs. 43.94 lakhs and Rs. 17 lakhs from its bank accounts, an amount significantly higher than the Rs. 26 lakhs deposited. This led to a presumption that the cash deposited was merely a re-deposit of earlier withdrawals, thus not unexplained. Consequently, the addition made by the lower authorities was deleted.
Key Issues
Whether cash deposits during demonetization, treated as unexplained under section 69A r.w.s. 115BBE, could be considered explained if they were re-deposits of previously withdrawn cash.
Sections Cited
Section 147, Section 143(3), Section 69A, Section 115BBE
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Income Tax Appellate Tribunal, DELHI BENCH: “SMC” NEW DELHI
Before: SHRI SATBEER SINGH GODARA
DIN & Order No:ITBA/NFAC/S/250/2025-26/1083088688(1), dated 28.11.2025 involving proceedings under section 147 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
Heard both the parties. Case file perused.
It transpires during the course of hearing that both the learned lower authorities have treated the assessee’s cash deposits during demonetization amounting to Rs.26.17 lakh as unexplained under section 69A r.w.s. 115BBE of the Act; in assessment order dated 25.12.2019 and upheld in lower appellate discussion.
That being the case, the tribunal hereinabove notices from the perusal of the assessee’s twin bank accounts statement maintained in Axis Bank that it had already withdrawn total cash of Rs.43.94 lakhs and Rs.17 lakhs, whereas, the cash deposits addition of is much a less figure of Rs.26 lakhs only.
The same gives a rise to a presumption in assessee’s favour that it had re-deposited the cash earlier withdrawn which could not have been treated as unexplained. The impugned addition stands deleted in very terms.
The assessee’s appeal is allowed.