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Facts
The assessee, an individual, declared income of Rs.1,78,670/- for AY 2017-18. The Assessing Officer (AO) noticed a cash deposit of Rs.70,52,849/- in the assessee's savings account, with Rs.35,83,000/- deposited during the demonetization period. The assessee claimed these deposits were out of earlier withdrawals made for house renovation.
Held
The Tribunal held that the addition of Rs.8,95,750/- made on an estimated basis by the First Appellate Authority was unjustified. The Tribunal found that the assessee's explanation for withdrawals for renovation and subsequent redeposits was credible, especially since the First Appellate Authority had already accepted the source of pre-demonetization deposits.
Key Issues
Whether the addition of cash deposits made during the demonetization period, claimed to be out of earlier withdrawals for renovation, can be treated as unexplained income.
Sections Cited
69A, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH, ‘D’: NEW DELHI
Before: SHRI SAKTIJIT DEY & DR. B.R.R. KUMAR
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘D’: NEW DELHI
BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER
ITA No.1514/DEL/2021 [Assessment Year: 2017-18]
Manju Goel, vs Income Tax Officer, A-1/11, Prashant Vihar, Ward Int. Tax-1(3)(1), New Delhi-110085 Delhi-110002 PAN-AXEPG9275A Appellant Respondent
Appellant by Sh. Amit Goel, CA & Sh. Pranav Yadav, Adv. Respondent by Sh. Sanjay Kumar, Sr. DR
Date of Hearing 08.01.2024 Date of Pronouncement 10.01.2024
ORDER PER SAKTIJIT DEY, VP, This appeal by the assessee is against the order dated
26.08.2021 of the Learned Commissioner of Income Tax
(Appeals)-42, Delhi for Assessment Year 2017-18.
The dispute in the present appeal is confined to the
addition of Rs.8,95,750/- under section 69A r.w.s. 115BBE of
the Income Tax Act, 1961 (hereinafter ‘the Act’).
Briefly the facts are, the assessee is a resident individual.
For the assessment year under dispute, the assessee filed her
2 ITA No.1514/Del/2021
return of income on 27.03.2018, declaring income of
Rs.1,78,670/-. The return of income so filed by the assessee was
selected for scrutiny to examine the “cash deposit during the
year and cash deposit during demonetization period”. In course
of assessment proceedings, while the Assessing Officer was
looking into the information available on record, noticed that in
the year under consideration, the assessee had deposited an
amount of Rs.70,52,849/- in cash in her NRO saving bank
account maintained with Axis Bank, Pitampura Branch, Delhi.
Out of which, an amount of Rs.35,83,000/- was deposited
during demonetization period. Noticing this, the Assessing
Officer called upon the assessee to explain the source of cash
deposits both pre and post demonetization. In response to the
query raised, the assessee submitted that entire cash deposits
were out of earlier withdrawals. The Assessing Officer, however,
was not convinced with the submission of the assessee and
proceeded to add back the entire cash deposit of Rs.70,52,849/-
by treating it as unexplained money u/s 69A of the Act and
brought it to tax at the special rate of 60% in terms with section
115BBE of the Act.
3 ITA No.1514/Del/2021
The assessee contested the aforesaid addition before
Learned First Appellate Authority. Being partly convinced with
the submissions of the assessee, learned Commissioner of
Income Tax (Appeals) sustained the addition to the extent of
Rs.8,95,750/-, being 25% of the total cash deposits and deleted
the balance addition.
We have considered rival submissions and perused the
material available on record. It is evident, from the stage of
assessment proceeding itself; the assessee has consistently
stated that the deposits were out of earlier withdrawals. Before
Ld. First Appellate Authority, the assessee, while explaining the
reason for cash withdrawals, had stated that due to renovation
work of the house, the cash was regularly being withdrawn. As
discussed earlier, out of the total cash deposits of
Rs.70,52,849/-, an amount of Rs.34,69,849/- was deposited
prior to the date of demonetization and the balance amount
Rs.35,83,000/- was post demonetization. Ld. First Appellate
Authority has fully accepted assessee’s explanation with regard
to the cash deposits prior to demonetization. Even, in respect of
cash deposit post demonetization, Ld. First Appellate Authority
has, more or less, accepted assessee’s submission of source
4 ITA No.1514/Del/2021
being from earlier withdrawals. He has also accepted that the
gap between withdrawals and deposits is reasonable. Therefore,
he has held that the entire cash deposits of Rs.35,83,000/- post
demonetization cannot be treated as unexplained. However,
merely, because the assessee did not furnish the valuation
report of the house before and after renovation/repair, Ld. First
Appellate Authority, on purely estimated basis, disallowed 25%
of the cash deposits after demonetization. This in our view is
unjustified. When Ld. First Appellate Authority has believed the
assessee’s version that the withdrawals were made for
renovation/repair of the building and surplus withdrawals were
again re-deposited only because of lack of valuation report,
estimated addition cannot be made. Therefore, we are inclined to
delete the addition of Rs.8,95,750/-. The Assessing Officer is
directed accordingly.
In the result, appeal of the assessee is allowed.
Order was pronounced in the open court on 10/01/2024.
Sd/- Sd/- [B.R.R. KUMAR] [SAKTIJIT DEY] ACCOUNTANT MEMBER VICE PRESIDENT Delhi; Dated: 10/01/2024. f{x~{tÜ? f{x~{tÜ? f{x~{tÜ? f{x~{tÜ?
5 ITA No.1514/Del/2021