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Income Tax Appellate Tribunal, LUCKNOW BENCH ‘SMC’ LUCKNOW
Before: SHRI T.S. KAPOOR
This is an appeal filed by the assessee against the order of ld. CIT(A)-1, Lucknow dated 15.09.2020. The grounds of appeal taken by the assessee are reproduced below: “1. The learned Commissioner of Income Tax (Appeals)-I, Lucknow (here-in-after referred to as the Ld. CIT (A)'s grossly erred on facts and in law in conforming the addition to the extent of Rs.2,00,000/- being amount deposited in cash in bank accounts during the period of demonetization and which was taxed as per section 69A read with section 115BBE of the Act wholly on notions, conjectures and surmises and thus the addition so confirmed being devoid of any merit may kindly be ordered to be deleted.
2. The Ld. C1T (A)'s grossly erred on facts and in law in conforming the addition to the extent of Rs.2,00,000/- wholly on estimate basis without assigning any reason as to why the said amount is being confirmed whereas complete explanations were given regarding the source of the cash availability and thus the addition so confirmed only on whims and fancies without any basis may be ordered to be delete.
3. That the Ld. CIT (A)'s was not justified in conforming the addition of the deposit so made in the bank of demonetized currency of Rs.2,00,000/- as the appellant had duly shown the bank accounts from which the amount was withdrawn from banks on previous dates and also the fact regarding receiving the amount from his brother due to serious ill health of self and spouse and the amount already kept with him from withdrawals made from bank and thus the addition so made on whims and fancies against all settled principles of law and natural justice be ordered to be deleted.”
The ld. AR at the outset submitted that assessee during the period of demonetization had deposited Rs.17,57,130/- in saving bank account in Vijaya Bank and Assessing Officer had added back the entire amount by rejecting the explanation of the assessee that some of the deposits were made out of earlier cash withdrawal which were kept with his brother Shri Anil Singh.
Aggrieved with the addition the assessee filed an appeal before the ld. CIT(A) who appreciated the entire facts and allowed the claim of the assessee and restricted the addition to Rs.2.00 lacs by holding that there must be some cash which the assessee must have used for household expenses. The ld. AR in this respect invited my attention to the paper book pgs. 1 and 2 where the sources of cash deposits have been explained and which fact was also explained to the ld. CIT(A). The ld. AR submitted that assessee himself had deducted Rs.2,92,870/- for household expenses therefore sustenance of addition of Rs.2.00 lacs for household expenses is not justified.
The ld. DR on the other hand submitted that assessee has already got substantial relief and ld. CIT(A) has sustained the addition for a very limited amount and therefore his further relief is not warranted.
I have heard the rival parties and have gone through the material placed on record. I find that a total addition of Rs.17,57,130/- was made by the Assessing Officer. Before the ld. CIT(A) the assessee explained the sources of cash deposits which were out of receipt from his brother and out of withdrawals from the bank account. The ld. CIT(A) while agreeing the submissions of the assessee has allowed substantial relief to the assessee but upheld an addition of Rs.2.00 lacs by holding that there must be some expenditure which the assessee must have used for household expenses. While holding so, it has escaped the attention of ld. CIT(A) that in the position of cash as on 18.11.2016 the assessee had already reduced an amount of Rs.2,92,872/- as withdrawals of household expenses therefore further sustenance of Rs.2.00 lacs on account of assumed household expenses is not justified and therefore I delete the same.
In the result, the appeal filed by the assessee is allowed.