NAVNITBHAI JERAMBHAI DESAI,SURAT vs. ITO, WARD- 3(2)(1), SURAT

This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 13.12.2024 by the National Faceless Appeal Centre (NFAC), Delhi/Commissioner of Income-tax (Appeals) [in short, ‘CIT(A)’] for the Assessment Year (AY) 2017-18, which in turn arises out of assessment order passed by Assessing Officer (in short, ‘AO’) u/s 144 of the Act dated 26.11.2019. Grounds of appeal

Facts of the case in brief are that assessee filed his return of income for AY 2017-18 on 01.08.2017 declaring total income of Rs.1,42,170/- including income from other sources of Rs.1,28,441/-. The case was selected for scrutiny under CASS for the reason that assessee had deposited substantial cash in his bank accounts. The AO issued statutory notices u/s 143(2), 142(1) and show cause notice to explain the cash deposit of Rs.13,68,000/- in his bank accounts with ICICI Bank. As the assessee failed to explain the source of the above cash deposits, the AO added Rs.13,68,000/- u/s 69A of the Act and levied tax @ 60% u/s 115BBE of the Act. Aggrieved by the addition made by AO, assessee preferred appeal before CIT(A).

During the appellate proceedings, the appellant filed written submissions and forwarded/uploaded various explanations and details as had been submitted before the AO. The CIT(A) observed that nothing new was submitted before him. The appellant could not explain beyond doubt the source of cash deposit with proper evidences. Hence, he upheld the addition made by AO and also the applicability of provisions of Section 115BBE of the

Further aggrieved by the order of CIT(A), the assessee has filed present appeal before the Tribunal. The Ld. AR of the assessee filed paper books containing various details submitted to the lower authorities including reply to the AO and CIT(A) as well as bank statements of ICICI Bank, cash flow statement and details of payments received from EPF and his employer. He submitted that the assessee had received Rs.53,74,462/- from EPF on 12.06.2014, which is at page-16 of the paper book. He also submitted that the appellant received Rs.10,00,000/- as gratuity from his employer, M/s Venus Jewel. The cash flow statement from 01.04.2014 to 31.03.2017 is at pages-29 to 31 of the PB as per which the cash-in-hand was Rs.28,18,700/- as on 07.11.2016. The Ld. AR submitted that the appellant had deposited cash of Rs.6,00,000/- and Rs.7,68,000/- in ICICI Bank accounts during demonetization period out of his withdrawals in the earlier period. The appellant was an employee of M/s Venus Jewel for 18 years before taking voluntary retirement. The appellant had received Rs.53,74,462/- as withdrawal from EPF and Rs.10,00,000/- as gratuity from his employer. The above amounts were withdrawn from the ICICI Bank accounts from time to time and the appellant had re-deposited Rs.13,68,000/- during demonetization period. The Ld. AR also submitted that under similar facts and circumstances, the Co-ordinate Bench

On the other hand, Ld. SR-DR for the Revenue supported the orders of lower authorities.

We have heard both the parties and perused the materials on record. We have also deliberated the decision relied upon by the Ld. AR. The Ld. AR submitted that assessee was employed with M/s Venus Jewel for more than 18 years and he took voluntary retirement from the said firm. He had withdrawn Rs.53,74,462/- from EPF account and Rs.10,00,000/- was credited by his employer into his bank account as gratuity. The appellant had withdrawn money from time to time from the above deposits in his bank account with ICICI Bank and he had sufficient cash balance of Rs.28,18,700/- as on 07.11.2016. The deposit of Rs.13,68,000/- was made out of the cash available with him immediately before the demonetization period. Even after the impugned cash deposits, the appellant still had balance of Rs.14,68,700/- as cash-in-hand. Therefore, the addition made by AO and confirmed by the CIT(A) is not proper. The Ld. AR also relied on the decision in case of Ashsokbhai J Desai (supra), brother of the appellant, where the co-ordinate Bench has deleted similar addition. In the said case there was cash deposit of Rs.15,90,000/- during demonetization period. His brother was also an employee of M/s Venus Jewel. He has received Rs.22,17,402/- from EPF and Rs.10,00,000/- as gratuity from employer. The grounds of appeal