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Facts
The assessee, an NRI, filed an appeal against the order of the CIT(A) for AY 2017-2018. The appeal was delayed by 11 days, which was condoned. Two additions were in dispute: cash deposit of Rs. 15,99,000/- and source for purchase of an immovable property for Rs. 65,50,898/-.
Held
The Tribunal held that the funds withdrawn from the assessee's NRO account and redeposited during demonetization were out of accounted money, especially since there was no source of unaccounted income. For the second addition, the Tribunal found that the transaction in AY 2017-2018 was through bank accounts and NRE accounts, and a prior transaction in 2014 was irrelevant.
Key Issues
Whether the additions made by the AO and confirmed by the CIT(A) regarding cash deposits and property purchase are sustainable.
Sections Cited
Section 10(1), Section 68, Section 2(30)
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Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK
Before: SHRI GEORGE MATHAN & SHRI RAJESH KUMAR
(नििाारण वर्ा / Assessment Year : 2017-2018) Sunil K Epari, Vs ACIT, International Taxation, 123, Putnam Way Silver Spring Bhubaneswar Mechanicsburg, Foreign, United States of America PAN No. :ABXPE 7883 R (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) नििााररती की ओर से /Assessee by : Shri Pranaya Kumar Mishra & Shri Prashant Mishra, ARs राजस्व की ओर से /Revenue by : Shri Vijay Singh, Sr. DR सुनवाई की तारीख / Date of Hearing : 01/12/2025 घोषणा की तारीख/Date of Pronouncement : 01/12/2025 आदेश / O R D E R Per Bench : This is an appeal filed by the assessee against the order passed by the ld. CIT(A), Kolkata-22, dated 28.11.2024 for the assessment year 2017-2018.
At the outset, we found that the appeal of the assessee is delayed by 11 days. In this regard, the assessee has filed condonation of application along with affidavit stating sufficient reasons for condonation of delay, which are not found to be false. Ld. Sr. DR did not object to condone the delay. Accordingly, we condone the delay of 11 days delay and proceed to dispose off the appeal.
It was submitted by the ld. AR that two additions are in dispute. The first addition is in respect of cash deposit of Rs.15,99,000/- and the second Rs.65,50,898/-. It was the submission that the assessee is an NRI. In regard to the amount of Rs.15,99,000/-, ld. AR drew our attention to the order of the ld. CIT(A) in para 5.1 to 5.3. It was the submission that these amounts were withdrawn from ICICI bank NRO account of the assessee i.e. Rs.5,00,000/- on 18.04.2016 and Rs.7,00,000/- on 20.04.2016 and from the money he exchanged at the time of his visit to India. It was the submission that the amounts have been withdrawn for the construction of a property purchased in Behrampur, however, during the demonetization period an amount of Rs.8,99,000/- and Rs.7 lakhs was deposited. It was the submission that these money drawn from the NRO account of the assessee could not be utilized, therefore, the funds were redeposited during the demonetization period. It was the submission that the assessee was only source of income from the income from house property being rental income. It was the submission that the assessee has no other income or sources in India. It was the submission that the ld. CIT(A) has accepted the source of Rs.3,21,402/- and has confirmed the balance addition of Rs.12,77,598/-. It was the submission that the money were withdrawn from the NRO account and it is not disputed. There is no deposit in the bank account of the assessee during demonetization period.
In reply, ld. Sr. DR vehemently supported the orders of the AO and ld. CIT(A). It was the submission that the assessee has not proved that the funds withdrawn were not used for its activity for which it was withdrawn.
5. We have considered the rival submissions. It is an accepted fact that the assessee is an NRI. It is also an accepted fact that the assessee does have any other source of income in India other than rental income. It is an accepted fact that the moneys have been withdrawn from the account of the assessee maintained with ICICI bank and he exchanged at the time of his visit to India. This has also been examined by the ld. AO and ld. CIT(A). When the money has withdrawn from the bank accounts and redeposited in the bank account of the assessee on account of demonetization, it would be held that the deposit during the demonetization is out of the accounted money of the assessee, especially when there is no source of the assessee of unaccounted income. Consequently, the addition of Rs.12,77,598/- made by the AO and confirmed by the ld. CIT(A) stands deleted.
In regard to the addition of Rs.65,50,898/-, it was submitted by the ld. AR that these funds were received by the assessee form the NRE account of his concern and the same were received in NRE account of the assessee. It was the submission that the ld. CIT(A) took the stand that the assessee had not proved that the funds were actually provided to one of his friends, namely, Shri Silla Malleswar Rao in 2014 and, therefore, had confirmed the addition. It was the submission that the transactions were through bank account and these are NRE accounts for which local cheques cannot be introduced. These are the funds that have been received by the assessee from his foreign friends and the same is liable to be deleted.
In reply, ld.Sr. DR submitted that the assessee has not shown that the assessee has provided the loan to his friend which has been repaid