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Facts
The assessee, an individual and director of a company, deposited Rs. 14,50,000/- in Specified Bank Notes (SBN) between November 17, 2016, and December 14, 2016. The Assessing Officer (AO) added this amount to the assessee's income, considering the deposit to be beyond a reasonable time after demonetization was announced.
Held
The Tribunal held that the AO had not brought out any material to prove the SBNs were unexplained. The assessee had shown sufficient cash balance prior to demonetization and deposited the cash within the prescribed period. The addition made by the AO and confirmed by the CIT(A) was set aside.
Key Issues
Whether the addition made by the AO on account of deposit of Specified Bank Notes (SBN) after one week of demonetization is justified, when the assessee had sufficient cash balance and deposited within the prescribed period.
Sections Cited
69A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI
Before: SHRI SS VISWANETHRA RAVI & SHRI JAGADISH
Murugesamudaliar Kaveripattinam The Dy. Commissioner of Income Swaminathan, Vs. Tax, 3/275, Sri Ramulu Nagar, Circle-1(1), Kaveripattinam, Salem, Krishnagiri – 635 112. [PAN: ACPPS 8142N] (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथG की ओर से/ Appellant by : Shri S. Sridhar, Advocate (Erode) IJथG की ओर से /Respondent by : Ms. R. Anita, Addl. CIT सुनवाई की तारीख/Date of Hearing : 13.08.2024 घोषणा की तारीख /Date of Pronouncement : 21.08.2024 आदेश / O R D E R PER JAGADISH, A.M: Aforesaid appeal filed by the assessee for Assessment Year (AY) 2017-18 arises out of the order of Learned Commissioner of Income Tax (Appeals), [NFAC], Delhi [hereinafter “CIT(A)”] dated 08.02.2024.
The only effective ground of appeal in this case is against the addition on deposit of Specified Bank Notes (SBN) of Rs.14,50,000/- in the bank account of the assessee during demonetization period. :- 2 -:
3. The brief facts of the case are that the assessee is an individual and is a director in M/s. Glorrey Match Industries Pvt. Ltd. The assessee has filed his return of income of Rs. 25,53,250/- on 22.03.2018. The assessee has made cash deposits of Rs. 30,50,000/- in his SBNs during demonetization period. Out of the said sum, Rs 16,00,000 has been deposited within a week from announcement of demontization and the balance amount of Rs. 14,50,000/- was deposited from 17.11.2016 to 14.12.2016. The A.O accepted deposit made by 16.11.2016, but did not accept the deposits made after 17.11.2016 to 14.12.2016 as the deposits were beyond reasonable time. The A.O has made addition u/s. 69A of the Act.
Being aggrieved, the assessed filed an appeal before Ld. CIT(A), the Ld. CIT(A) has confirmed the addition made by A.O as the assessee has not made submissions in support of his case.
The Ld. AR has contended that assessee during course of assessment has submitted the cash balance available on 08.11.2016 of Rs 81,22,477 .The Ld AO while accepting the deposit made in bank account from 9.11.2016 to 16.11.2016 of Rs 16,00,000 has made the addition of Rs 14,50,000 merely because it was deposited :- 3 -: after one week of date of announcement of demonetization . The Ld. AR further submitted that the delay in deposit within a week cannot be a reason to make addition if the assessee was allowed to deposit the SBNs till 14.12.2016 and the cash was explained .
The Ld. DR , on the other hand supported the orders of the authorities below.
We have heard rival contentions and gone through the orders of the authorities below. The assesse has shown cash balance of Rs.81,22,477/- as on 08.11.2016 i.e., date of demonization. The AO has accepted cash deposit made in bank account of Rs 16,00,000/- within one week of date of announcement of demonetization, but has made addition of Rs. 14,50,000/-, merely because the assessee has not deposited the SBNs between 09.11.2016 to 14.11.2016. The A.O has not brought out any material that the SBNs of Rs. 14,50,000/- was unexplained. The assesse has deposited cash within the prescribed period ie before 14.12.2016. The Ld. CIT(A) has confirmed the addition without considering the relevant facts . We, therefore, set aside the order passed by the Ld. CIT(A) and order AO to delete the :- 4 -: addition made u/s 69A. In view of the above, the appeal filed by the assessee is allowed.
In the result, the appeal filed by the assessee is allowed.
Order pronounced on 21st August, 2024. (यस यस िव"ने" रिव) (जगदीश) (Jagadish) (SS Viswanethra Ravi) लेखा लेखा सद"य लेखा लेखा सद"य सद"य /Accountant Member सद"य सद"य / Judicial Member "याियक "याियक सद"य "याियक "याियक सद"य सद"य चे"ई/Chennai, "दनांक/Dated: 21st August, 2024. EDN/-