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Facts
The assessee, a retired government servant, deposited Rs. 9,97,000/- in his bank during demonetization in November 2016, claiming the funds were from prior withdrawals (May 2016) for medical treatment after a paralytic attack. The authorities rejected this explanation due to a six-month gap between withdrawal and deposit, adding the amount to his income under Section 144 of the Act, which was then confirmed by the First Appellate Authority.
Held
The Tribunal found the rejection of the assessee's explanation by lower authorities, solely based on the time gap and demonetization, unacceptable given the assessee's medical condition and supporting evidence. Consequently, the addition of Rs. 9,97,000/- to the assessee's total income was deleted. The Tribunal clarified that this decision should not be treated as a precedent.
Key Issues
Whether an addition for cash deposited during demonetization, claimed as prior withdrawals for medical treatment, can be sustained solely due to a time gap between withdrawal and deposit.
Sections Cited
Section 144 of the Act
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Income Tax Appellate Tribunal, “SMC” BENCH, DELHI
Before: MS. MADHUMITA ROY
The instant appeal filed by the assessee is directed against the order passed by the ADDL/JCIT(A)-9, Mumbai, dated 06.03.2024 arising out of the order passed by Ld. ITO, Ward-68(4), Delhi, dated 19.12.2019 under Section 144 of the Act (hereinafter referred to as ‘the Act’) for Assessment Year 2017-18.
The assessee deposited Rs.9,97,000/- in his bank account lying with Central Bank of India Patparganj, Delhi, during demonetization period. Before that the assessee withdrew amount of Rs.4,80,000/- on 06.05.2016 and Rs.6,00,000/- on 07.05.2016. The said amount was withdrawn for the purpose of medical treatment as the assessee got paralytic attack. The assessee was under consistent medical treatment under the Dr. Ram Manohar Lohia, Hospital New Delhi, which is evident from the OPD registration card. The assessee is a retired government servant and pension have been received during the Financial Year 2016-17 of Rs.2,15,375/-. The deposit made during demonetization in the month of November 2016 out of the withdrawal made by the assessee on May 2016 has not found to be acceptable and, therefore, the same was added to the total income of the assessee which was further confirmed by the First Appellate Authority. Hence, the instant appeal.
Heard the parties, perused the records. Having regard to the explanation rendered by the assessee and keeping in view the ailment suffered by the assessee and the money withdrawn for medical treatment, the rejection of the same by the authorities below merely because there is gap of 6 months from the date of withdrawal and deposit which by chance happened during demonetization, is found to be not acceptable. Hence, the addition 2 Gajender Singh is deleted. However, it is made clear that this matter will not be treated as precedent.
Assessee’s appeal, is thus, allowed.
Order pronounced in the open court on 14.11.2024