BINAY SINGH,KOLKATA vs. ITO, WARD-49(3), KOLKATA
Facts
The assessee's case for AY 2016-17 was selected for scrutiny due to large cash deposits in his savings bank account. The AO made an addition of ₹12,11,000/- for these deposits, rejecting the assessee's cash flow statement. The Ld. CIT(A) upheld this addition, incorrectly observing that the deposits were made during the demonetization period.
Held
The Tribunal found merit in the assessee's explanation that the cash was withdrawn from bank accounts in earlier years (AY 2011-12 to FY 2015-16) and redeposited in FY 2015-16, providing a proper cash flow statement. It noted the CIT(A)'s demonetization observation was erroneous as the period was different and acknowledged the funds were kept for the assessee's ailing wife's treatment. The Tribunal set aside the CIT(A)'s order and directed the AO to delete the addition.
Key Issues
Whether the addition of ₹12,11,000/- on account of cash deposits into the bank account during the year was justified, considering the assessee's explanation of withdrawals in earlier years for his wife's medical treatment.
Sections Cited
143(2), 142(1), 56(2)(viib), 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, KOLKATA
Before: SHRI RAJESH KUMAR, AM & SHRIPRADIP KUMAR CHOUBEY, JM
Per Rajesh Kumar, AM:
This is an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals) ADDL/JCIT(A)-2, Gurugram(hereinafter referred to as the “Ld. CIT(A)”] dated 06.12.2024 for the AY 2016-17.
The only issue raised by the assessee is against the confirmation of addition of ₹12,11,000/- by the ld. CIT (A) as made by the ld. AO on account of cash deposits during the year by the assessee into the bank account.
In the appellate proceedings, the assessee raised only the issue of cash deposit as the other issue was conceded and not pressed before the ld. CIT (A). The ld. CIT (A) in the appellate proceedings, dismissed the appeal of the assessee by observing and holding as under:-
“6.5 During the FY. 2015-16 the appellant had made an aggregate cash deposit of Rs. 12, 11,000/- in his savings a/c no-00290100006546 with the Bank of Baroda. India Exchange Place branch Kolkata. In the course of the assessment proceeding the A.O. had directed the appellant to explain the source of the said cash deposits in response there to, the appellant had furnished a cash flow statement for the running period covering five financial years i.e. 2011-12 to 2015-16 along with copy of Bank statements. On close scrutiny of the said cash-flow statement, read with the bank statements from It can be discemed that the appellant had regularly withdrawn and deposited cash in his aforesaid bank a/c at regular intervals.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 26.02.2026.
Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 26.02.2026 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT DR, ITAT, 4. 5. Guard file. BY ORDER, True Copy//
Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata
