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Facts
The assessee, a retired salaried employee, deposited Rs. 12,04,000/- in cash during the demonetization period (A.Y. 2017-18) across several bank accounts. The Assessing Officer added this amount as unexplained money under Section 69A and also added Rs. 36,542/- for undisclosed bank interest. The assessee contended that the cash originated from prior bank withdrawals kept for medical and family exigencies.
Held
The Tribunal found that the assessee successfully explained the source of cash deposits to the extent of Rs. 11,12,000/- from past bank withdrawals, leading to a partial deletion of the addition. The remaining addition of Rs. 92,000/- for unexplained cash was sustained. The addition of Rs. 36,542/- for undisclosed bank interest was confirmed due to lack of submissions from the assessee's counsel.
Key Issues
Source of cash deposits made during demonetization under Section 69A and addition for undisclosed bank interest.
Sections Cited
143, 69A, 142(1)
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Income Tax Appellate Tribunal, PUNE BENCHES “SMC”, PUNE
Before: DR.MANISH BORAD
Appellant by : Shri Shaikh Bashiruddin Respondent by : Shri Dayanand Jawalikar Date of hearing : 09.03.2026 Date of pronouncement : 10.03.2026 आदेश / ORDER The captioned appeal at the instance of assessee pertaining to A.Y.2017-18 is directed against the order dated 18.08.2025 framed by Addl/JCIT(A)-1, Ahmedabad arising out of Assessment Order dated 04.12.2019 passed u/s. 143 of the Income Tax Act, 1961 (in short ‘the Act’).
The grievance of the assessee is that ld.CIT(A) erred in confirming the action of the Assessing Officer making addition of Rs.12,04,000/- on account of unexplained money u/s.69A of the Act and undisclosed bank interest at Rs.36,542/-.
Brief facts of the case are that the assessee is a salaried employee and as per the submissions filed before this Tribunal assessee retired from service in the month of September, 2016 and also earned retirement benefits viz. Gratuity, Commuted Pension and GPF etc. Income of Rs.7,31,610/- declared in the return for A.Y. 2017-18 e-filed on 25.07.2017. Based on the information about cash deposit during the demonetization 2 Hasina Mohammad Haji Shaikh period, case of the assessee selected for Limited Scrutiny under CASS followed by validly serving statutory notices u/s.142(1) of the Act. Ld. Assessing Officer observed that assessee has deposited Rs.12,04,000/- during the demonetization period in the bank account held with Bank of Maharashtra, State Bank of Hyderabad, The Bhagyalakshmi Mahila Sahakari Bank Ltd. and another bank account held with Bank of Maharashtra. It has been contended by the assessee that source of cash deposit is the cash withdrawals from the declared bank accounts in the preceding years and the same being kept in the bank account for the medical exigencies and other family requirements. However, ld. Assessing Officer was not satisfied with these submissions and observed that no major cash has been withdrawn during the year under consideration and made addition u/s.69A of the Act at Rs.12,04,000/-. Further, ld. Assessing Officer observed that assessee has not offered interest income of Rs.36,542/- and made addition thereof. Income assessed at Rs.19,72,152/-.
Aggrieved assessee preferred appeal before ld.CIT(A) but failed to succeed. Now the assessee is in appeal before this Tribunal.
Ld. Counsel for the assessee only argued on the addition for unexplained money u/s.69A of the Act at Rs.12,04,000/- reiterating the submissions made before both the lower authorities and prayed for deletion of the impugned addition. Reference also made to the various decisions of the coordinate benches placed on record.
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On the other hand, ld. DR supported the order of ld.CIT(A).
I have heard the rival contentions and perused the record placed before me. The only effective issue raised before me is against the addition of Rs.12,04,000/- made by the Assessing Officer u/s.69A of the Act for unexplained money for the cash deposited during the demonetization period. I observe that the assessee has retired from service during the year under consideration and therefore she is considered as a Senior Citizen. Ld. Counsel for the assessee explaining the source of alleged cash deposit submitted that the cash withdrawals are from the bank in the past and details of which are placed on page 5 of the paper book and the major withdrawals are on 16.12.2014 at Rs.3.00 lakh, on 18.12.2014 at Rs.1.20 lakh and 21.03.2016 at Rs.5.00 lakh. Apart from this there are other withdrawals also ranging from Rs.10,000/- to Rs.70,000/-. All these withdrawals are from the Bank of Maharashtra. Admittedly, there are no major cash withdrawals during the year under consideration except Rs.5,000/-, Rs.70,000/- and Rs.10,000/- on 26.05.2016, 08.07.2016 and 28.10.2016. I also note that assessee has filed cash flow statement at pages 40 to 51 of the paper book showing cash in hand as on 01.04.2014 at Rs.4,64,250/- and thereafter all the cash withdrawals and cash deposits are mentioned therein. Before the declaration of demonetization scheme, the closing cash in hand is stated at Rs.18,11,135/-. Certainly, the assessee being a salary employee is not maintaining regular books of account and therefore the opening cash in hand as on 01.04.2016 at Rs.17,25,135/- 4 Hasina Mohammad Haji Shaikh cannot be taken at its face value. However, withdrawals made from the bank account in the preceding financial years cannot be negated. It is also noted that assessee has not shown any drawings in the cash flow statement. From 01.11.2014 to 31.03.2016 total cash withdrawals amount to Rs.12,27,000/-. There is no finding of the Revenue authorities about application of such funds for any other purpose. Therefore, even if we consider the household drawings of Rs.2.00 lakh during F.Y. 2014-15 and 2015-16 then also the cash in hand to the extent of Rs.10.27 lakh from the previous cash withdrawals remains in hand with the assessee as on 31.03.2016. Assessee has further withdrawn Rs.85,000/- prior to the declaration of the demonetization scheme which totals to the total cash in hand available with the assessee from cash withdrawals at Rs.11,12,000/-. I am therefore of the considered view that the assessee has successfully explained the source of cash deposit of Rs.11,12,000/- and the partial relief for the same is granted and impugned addition to the extent of Rs.11,12,000/- stands deleted and remaining addition of Rs.92,000/- is sustained.
So far as the addition for interest income of Rs.36,542/- is concerned, no submissions has been made by ld. Counsel for the assessee. Therefore, the ground of appeal raised by the assessee on this issue is dismissed.
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In the result, the appeal of the assessee is partly allowed.