SANDEEP KUMAR GAGNEJA,. vs. ITO , .
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
AI-generated summary — verify with the full judgment below
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
ITA No. 3635/Del/2023 25.12.2019 passed by the ITO, Ward 35(4), Delhi under Section
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The assessee has withdrawn the said amount of sale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wherefrom it was withdrawn earlier on 01.03.2016.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
ITA No. 3635/Del/2023 No.06091000020095 and Rs.1,00,000 on 22.11.2016 in the same
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.
ITA No. 3635/Del/2023 5. With the aforesaid observations, the impugned addition is deleted.
In the result, the appeal filed by the assessed is allowed.
Order pronounced in the open court on 29/10/2024. Sd/- (MADHUMITA ROY) JUDICIAL MEMBER Dated: 29th October, 2024. Mohan Lal
