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Facts
The assessee sold a shop in March 2016 for Rs. 10,50,000, which was duly accounted for. During demonetization in November 2016, the assessee deposited Rs. 4,90,000 and subsequent amounts totaling Rs. 4,60,000 into bank accounts, claiming these were from previous bank withdrawals and miscellaneous cash from a discontinued business.
Held
The Tribunal held that the assessee had duly explained the source of the cash deposits, finding that they originated from prior bank withdrawals and genuine savings from an erstwhile business of train tickets. Consequently, the addition made by the CIT(A) was not justified and was deleted.
Key Issues
Whether the assessee adequately explained the source of cash deposits made during the demonetization period, especially concerning prior bank withdrawals and miscellaneous business savings.
Sections Cited
Section 143(3) of the Income Tax Act, 1961
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Income Tax Appellate Tribunal, DELHI BENCH: ‘SMC’ NEW DELHI
Before: MS. MADHUMITA ROY
PER MS. MADHUMITA ROY: JUDICIAL MEMBER:
The instant appeal filed by the assessee is directed against an order dated 20.10.2023 passed by Learned Commissioner of Income- Tax ADD/JCIT(A)-2, Bengaluru arising out of the order dated 143(3) of the Income Tax Act, 1961 for Assessment Year 2017-18.
The assessee is an individual, sold his shop/office lying and situated at Plot No.B-17, Shop No.2 (Basement), Commercial Complex, Mukherjee Nagar, Delhi-1100 09 to one Mr. Harvinder Singh and another for a consideration of Rs.10,50,000/- consideration whereof was received in instalments during the said month of March, 2016 in the savings account maintained with the Bank of Maharashtra, Mukherjee Nagar Branch, Delhi-1100 09 being Account No.20024334346.
The assessee has withdrawn the said amount of sale consideration and the same has been given effect in the return of income filed by the assessee for Assessment Year 2016-17 and duly paid taxes thereon.
During the Demonetization Period , the appellant deposited cash held in old currency to the tune of Rs.4,90,000 on 11.11.2016 in his Saving Bank Account maintained in the Bank of Maharashtra wherefrom it was withdrawn earlier on 01.03.2016. Further that on 13.11.2016, he deposited Rs.3,60,000 in HDFC Bank Account account out of the withdrawal of Rs.5,00,000 from Bank of Maharashtra on 29.03.2016. Further Rs.1,65,000 was deposited by the assessee in the HDFC Bank out of the miscellaneous cash in hands including past savings of business of train tickets which due to covid pandemic could not run properly and ultimately closed down. When the details of the Bank Accounts of the assessee, both with Bank of Maharashtra being Account No.20024334346 from where the cash was withdrawn on 01.03.2016 and 29.03.2016 to the tune of Rs.4,90,000/- and Rs.5,00,000/- respectively and that too through cheque and the details of HDFC Bank Account No.06091000020095 is made available with the Department, the source of the cash deposit in dispute has been duly explained by the assessee in my opinion, the confirmation of the addition made by the Ld. CIT(Appeals) is not justified. Further that the deposit of Rs.1,65,000/- out of the miscellaneous cash in hands including past savings and business receipt is also found to be explained keeping in view of the assessee’s erstwhile business which also seems to be genuine and thus such addition is also liable to be deleted.
In the result, the appeal filed by the assessed is allowed.