BINAY SINGH,KOLKATA vs. ITO, WARD-49(3), KOLKATA

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ITA 2131/KOL/2025Status: DisposedITAT Kolkata26 February 2026AY 2016-20174 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed the appeal of the assessee. The Tribunal noted that the assessee had made withdrawals from the bank account from AY 2011-12 onwards, which were redeposited in AY 2015-16. While the AO and CIT(A) rejected the assessee's explanation, the Tribunal found merit in the assessee's contention. The Tribunal observed that the CIT(A)'s comment regarding demonetization was factually incorrect, as the deposits were made in AY 2016-17, whereas demonetization occurred in AY 2017-18. The Tribunal acknowledged the serious illness of the assessee's wife and the need for funds for her treatment, noting her subsequent death on January 13, 2025. The Tribunal found that the assessee had filed a proper cash flow statement detailing withdrawals and deposits. Consequently, the Tribunal disagreed with the CIT(A)'s finding, set aside the CIT(A)'s order, and directed the AO to delete the addition of ₹12,11,000.

What were the facts?

The assessee, Binay Singh, filed his return of income for Assessment Year (AY) 2016-17 on August 4, 2016, declaring a total income of ₹2,98,120. The case was selected for scrutiny due to large cash deposits in his savings bank account and property transfers. The Assessing Officer (AO) issued notices under sections 143(2) and 142(1) of the Income Tax Act, 1961. Following the assessee's replies and evidence, the AO made an addition of ₹12,11,000 on account of cash deposits into the savings bank account during the financial year 2015-16, after rejecting the assessee's cash flow statement. Another addition of ₹11,49,070 was made under section 56(2)(viib). The assessment was framed under section 143(3) on December 20, 2018. The assessee appealed to the Commissioner of Income-tax (Appeals) [CIT(A)], challenging only the addition related to cash deposits, as the other issue was conceded. The CIT(A) upheld the addition.

What were the issues?

1. Whether the addition of ₹12,11,000 on account of cash deposits into the savings bank account during AY 2016-17 is justified, considering the assessee's explanation of withdrawals and personal custody for medical treatment. Assessee's Contentions: The assessee argued that the cash deposits were made from cash withdrawn from the same bank account over previous years and kept in personal custody for the treatment of his ailing wife. He submitted a cash flow statement showing an opening cash-in-hand balance of ₹12,36,000 for FY 2015-16, cash withdrawals of ₹4,28,900, expenses of ₹2,00,900, and a closing cash balance of ₹2,53,000 after depositing ₹12,11,000. The assessee contended that the CIT(A)'s observation about demonetization was incorrect as the deposits were made in AY 2016-17, prior to demonetization in AY 2017-18. Revenue's Contentions: The revenue, through the AO and the CIT(A), rejected the assessee's explanation. The AO rejected the cash flow statement, and the CIT(A) held that the assessee failed to provide supporting documents to substantiate his explanation and justify the cash deposits.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 142(1),Section 143(3),Section 56(2)(viib)

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

For Appellant: Shri Anil Kochar, AR
For Respondent: Shri Sanjib Kumar Paul, DR
Hearing: 20.01.2026Pronounced: 26.02.2026

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.

2.

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.

4.

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.

6.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 26.02.2026.

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