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Facts
The assessee declared an income of ₹2,61,800/- and was subjected to limited scrutiny due to significant cash deposits during the demonetization period. The Assessing Officer added ₹8 lacs under Section 69A as unexplained money, and the CIT(A) upheld this addition to the extent of ₹8 lacs.
Held
The Tribunal found the assessee's explanation that the cash deposited was a withdrawal for a heart surgery that was later redeposited to be reasonable and plausible. The Tribunal disagreed with the CIT(A)'s view that the source of prior cash deposits needed to be explained.
Key Issues
Whether the addition of ₹8 lacs under Section 69A as unexplained money is justified when the assessee provided a plausible explanation for the cash deposit from prior withdrawals.
Sections Cited
69A
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Income Tax Appellate Tribunal, “PATNA” BENCH, PATNA
Before: SHRI DUVVURU RL REDDY, VP & SHRI RAJESH KUMAR, AM
This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 08.11.2023 for the AY 2017-18.
At the outset, we note that the appeal of the assessee is barred by limitation by 409 days for which condonation petition alongwith affidavit is filed. At the time of hearing, the counsel of the assessee explained the reasons for delay in filing the appeal. The Ld. D.R , on the other hand strongly opposed the request for condoning the delay as the reasons aare not sufficient. After hearing the rival contentions and perusing the materials available on record, we find that the delay
The only issue raised by the assessee in various grounds of appeal is against the confirmation of addition of ₹8 lacs by the ld. CIT (A) as made by the ld. AO u/s 69A of the Act on account of unexplained money.
3.1. The facts in brief are that the assessee filed the return of income on 02.05.2017, declaring total income of ₹2,61,800/-. The assessee derives income by way of salary and other sources. The case of the assessee was selected for limited scrutiny on the ground that the assessee has deposited huge cash in demonetization period. Accordingly, the statutory notices along with questionnaire were issued and duly responded by the assessee. The ld. AO noted that the assessee has deposited ₹9 lacs during demonetization period. However, the ld. AO noted that the total cash deposit in the bank account during the financial year 2016-17, was ₹10 lacs comprising 2 deposits of ₹1 lacs prior to demonetization period and second 9 lacs during demonetization period. Accordingly, same was added u/s 69A of the Act.
3.2. During the appellate proceedings, the ld. CIT (A) affirmed the order of ld. AO by observing and holding as under:-
“I have gone through the submissions of the appellant and also the bank statements furnished. The income shown by the appellant in his return of income is only being income from salary. There is no other income shown by the appellant in his return. Now the claim of the appellant is that he had withdrawn Rs.9,00,000/- on 16.04.2016 and the same was deposited after demonetisation. However, as seen from the bank account, there have been several deposits made in cash prior to the withdrawal of Rs.9,00,000/-. The appellant has not given the source of the said cash deposits of Rs.9,00,000/-. The appellant does not have any other income offered to tax in the return filed. Therefore, withdrawal of cash cannot be given credit to unless the deposits of cash made earlier to the withdrawal are explained. As the appellant has not
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 07.01.2026.