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Facts
The assessee, an employee of Canara Bank and a national hockey player, filed his return declaring Rs. 4,24,800. The case was selected for limited scrutiny regarding cash deposits and withdrawals. The AO assessed Rs. 21,24,600 as unexplained investment and applied Section 115BBE.
Held
The Tribunal observed that the cash deposits were from earlier withdrawals made by the assessee, which were lying with him. The Tribunal noted that these transactions occurred before the demonetisation period, contrary to the AO's observation.
Key Issues
Whether the cash deposits made by the assessee were unexplained, and if the AO was correct in treating them as unexplained investment under Section 69A and applying Section 115BBE.
Sections Cited
139(1), 143(2), 144, 69A, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI LAXMI PRASAD SAHU & SHRI PRAKASH CHAND YADAV
Per Laxmi Prasad Sahu, Accountant Member
This appeal is filed by the assessee against the order dated 28.03.2024 of the CIT(Appeals), National Faceless Appeal Centre, Delhi [NFAC], for the AY 2017-18.
Briefly stated the facts of the case are that the assessee filed return of income u/s. 139(1) of the Act on 02.8.2017 declaring total income of Rs.4,24,800. The case was selected for limited scrutiny on the reasons (a) Cash deposit during the year, and (b) Cash withdrawals.
Notice u/s. 143(2) dated 14.08.2018 was issued to the assessee, but there was no response. It was noticed that the assessee had deposited cash in his bank account of Rs.21,24,600 at 11 instances as per assessment order para 4. The AO noted that the assessee is an employee of Canara Bank and national Hockey Player. Case was completed u/s. 144 after giving opportunity to the assessee and income was assessed at Rs.21,24,600 which was cash deposited and treated as unexplained investment u/s. 69A of the Act and the AO applied section 115BBE of the Act. Aggrieved from the above order, the assessee filed appeal before the First Appellate Authority (FAA).
The assessee submitted details of cash deposits with particular narration regarding source of cash for depositing in his bank account. The ld. FAA allowed credit for Rs.10,82,600 accepting sale of jewellery, own savings of Rs.1 lakh and Rs.1,94,000. However the remaining amount of Rs.10,41,999 was treated as unexplained money. Aggrieved, the assessee is in appeal before the ITAT.
The appeal is filed with a delay of 56 days and in this regard assessee has filed affidavit stating that he is an employee of Canara Bank and also a national hockey player and coach for national womens hockey team. Due to the requirements of his profession which involves extensive travel for matches and training sessions across various states and countries, he was not aware of the order passed by the ld. FAA (First Appellate Authority) and came to know of it when the OGE dated 19.04.2024 was given. Accordingly he filed the appeal.
After hearing both the sides, it is observed that there are sufficient reasons for the delay and following the judgment of the Hon'ble Apex Court in the case of Collector, Land Acquisition Vs. MST. Katiji and Others (1987) 167 ITR 471, delay in filing the appeal before the Tribunal is condoned.
The ld. AR reiterated the submissions and submitted that the ld. FAA has not given credit for Rs.10 lakhs cash withdrawal on 02.08.2016 by cheque No.329999 of Rs.7 lakhs and on 03.08.2016 by cheque No.330000 for Rs.3 lakhs. The bank statements were produced. He further submitted that there is no bar for keeping cash in hand. These transactions were before the demonetisation period. The AO has wrongly noted that the cash deposits were during the demonetisation period as per table in sl. No.1 to 11 in his order. There is no any single instance of cash deposits during the demonetisation period. In support of his arguments, he relied on the judgment in dated 16.04.2024.
The ld. DR relied on the orders of lower authorities and submitted that assessee has not given proof for cash deposits with cogent material and dates are also mismatching. Therefore he prayed that the order of lower authorities should be upheld.
Considering the rival submissions, we note that here the dispute is only regarding cash deposit of Rs.10,42,000. We note from the order of the FAA that cash deposits were explained. On 26.08.2016 assessee has deposited cash of Rs.4,50,000 and Rs.6 lakhs on 01.10.2016 and in between assessee has deposited cash of Rs.15,800 on 14.9.2016. Both the parties have not pointed out that the assessee has made any material investments in current assets or in fixed assets and there is no dispute on the drawings of the assessee. The assessee is a salaried employee and he has no any other source of income as submitted by the ld. AR of the assessee. Therefore it is clear that assessee has deposited cash from the earlier withdrawals which were lying with him. Accordingly there is withdrawal of Rs.10 lakhs (7 + 3 lakhs) and cash deposit of Rs.9,84,200 (10,00,000 – 15,800) from earlier withdrawal. Accordingly, we delete the addition of Rs.9,84,200 out of the addition confirmed by the ld. FAA.
In the result, the appeal by the assessee is partly allowed.
Pronounced in the open court on this 23rd day of September, 2024.