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Facts
The assessee, a non-resident individual, failed to file an income tax return for AY 2017-18. Information revealed cash deposits of Rs. 19,70,000/- during the demonetization period. Despite notices, the assessee remained silent, leading to an ex-parte assessment order.
Held
The Tribunal noted that the assessee's parents withdrew Rs. 25,50,000/- and deposited Rs. 19,70,000/- into the assessee's account, while their own accounts had other deposits and a net withdrawal. The Tribunal found that Rs. 3,10,000/- of the deposited amount was not explained.
Key Issues
Whether the addition of Rs. 9,70,000/- on account of unexplained cash deposits during demonetization was correctly sustained by the CIT(A), and if the Tribunal can confirm an addition of Rs. 3,10,000/- instead.
Sections Cited
69A, 142(1), 144, 69
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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGH, HON’BLE & SHRI S. R. RAGHUNATHA, HON’BLE
Year: 2017-18 Raja Arun, The Income Tax Officer, Old No. 13, New No. 25, Vs. International Ward -1(1), Bharathiyar Salai, Chennai. Vellore – 632 001. [PAN: AMVPA-2982-J] (अपीलाथ�/Appellant) (��यथ�/Respondent) अपीलाथ� क� ओर से/Appellant by : Shri. S. Sridhar, Advocate ��यथ� क� ओर से/Respondent by : Smt. M.S. Deeptha, JCIT सुनवाई क� तारीख/Date of Hearing : 08.08.2024 घोषणा क� तारीख/Date of Pronouncement : 14.08.2024 आदेश/O R D E R
PER S. R. RAGHUNATHA, ACCOUNTANT MEMBER:
This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals), Chennai-16, dated 18.01.2024 for the assessment year 2017-18.
The sole issue raised by the assessee is that the ld.CIT(A) erred in partly sustaining the addition to the tune of Rs.9,70,000/- being cash deposits made during the assessment
Brief facts of the case are that, the assessee is an individual, non-resident of India and did not file return of income for the A Y 2017-18. From the information available on record it was found that the assessee has made cash deposit of Rs.19,70,000/- during the demonetisation period into his bank account. Notice U/s.142(1) of the Act was issued to the assessee calling for the return, but the assessee remained silent for all the notices. Hence, the assessment proceeding was completed U/s.144 dated 27/12/2019 and entire cash deposits amounting to Rs.19,70,000/- was treated as unexplained money U/s.69A of the Act. Aggrieved by the order of the AO, the assessee preferred an appeal before the Ld.CIT(A).
Before the Ld.CIT(A), the assessee filed the statement of facts along with detailed written submissions and bank account of statements along with the cash flow statement showing the details of various withdrawals from his bank accounts and subsequent deposits made. Considering the facts and written Ld.CIT(A) partly allowed the appeal holding as under: “4.6 As seen from the above, there were cash deposits and withdrawals from the appellant's parents A/c, which exhibit a pattern mostly for self use. It cannot be said that the cash deposited and withdrawn consequently is saved in the form of cash for purchase of land, There is no evidence for the same. However, the personal loan taken by the appellant in Abu Dhabi which was transferred to the appellants mother Ale to the extent of Rs.10,00.000- is an explainable source. It is also seen that an amount of Rs.10,00,000/- was used by the appellant to purchase a property consequent to demonetization by banking channels. 4.7 Thus, an amount of Rs.9,70,000/- clearly calls for application of section 69 as the said amount belongs to the appellant as it was deposited in his account, does not find its place in any accounted books, and the source of the same is unexplained. Hence, Rs.9,70,000/- is sustained as unexplained money u/s 69A. Rs.10,00,000/- which has travelled from the appellants bank accounts obtained in Abu Dhabi as loan and utilized for purchase of land is treated as explained and the Assessing Officer is directed to delete the said addition u/s 69A, Thus, the conjoint Grounds of Appeal No.6. 7, 8, 9, 10, 11, 12, 13, 14 and 16 are Partly Allowed.”
Aggrieved by the order of the ld.CIT(A), the assessee is in appeal before us.
The Ld.AR further submitted that, during the assessment proceedings and appellate proceedings the complete details of source for cash deposits made during the demonetization period have been explained. Further, the Ld.AR drew our attention to the statement showing the explanation for cash withdrawn from the bank of assessee’s father Mr.Arun and Mother Mrs.Pushpa Assessee. “4.5 The funds flow statement furnished by the appellant is as under: Dates of Cash Cash Cash Account number transactions withdrawal deposited balance of puspa and on hand arun parents of (A) (B) (A-B) Raja where the activity happened 25.01.2016 100000 100000 VCCB 68461 25.01.2016 300000 400000 VCCB 68461 25.01.2016 200000 600000 IOB 23616 27.01.2016 100000 500000 IOB 23616 30.05.2016 100000 600000 VCCB 68461 30.05.2016 50000 650000 VCCB 68461 30.05.2016 1000000 1650000 IOB 23616 08.08.2016 100000 1750000 IOB 23616 27.09.2016 290000 1460000 VCCB 68620 27.09.2016 500000 960000 VCCB 68620 02.11.2016 200000 1160000 VCCB 62620 02.11.2016 500000 1660000 VCCB 68620 08.11.2016 100000 1560000 ICICI 10.11.2016 1870000 -310000 ICICI [ In light of the above statement, the Ld.AR prayed for allowing the appeal of the assessee by setting aside the impugned order of the Ld.CIT(A).
The Ld.DR relied on the orders of the lower authorities and prayed for dismissing the appeal of the assessee.
We have heard the rival contentions and gone through the orders of lower authorities and cash flow statement filed by the assessee. It is seen that the assessee’s parents (Mr.Arun and Mrs.Pushpa) have withdrawn cash from their respective bank account regularly from 25/01/2016 to 02/11/2016 to the tune of Rs.25,50,000/-. According to the Ld.AR the same has been deposited to the bank account of the assessee on 08/11/2016 of Rs.1,00,000/- and on 10/11/2016 of Rs.18,70,000/- and stated that the source for entire cash deposit has been proved by the assessee. However, it is noticed that, the assessee’s parents have made certain cash deposits also during the same period to their own bank account which amounts to Rs.8,90,000/- from the amounts withdrawn from their bank accounts. Thus, the cash on hand on the date of demonetization was Rs.16,60,000/- (Rs.25,50,000 (-) Rs.8,90,000). We note that the cash deposited in assessee’s bank account on 8/11/2016 and 10/11/2016 was Rs.19,70,000/- and hence the assessee had deposited an excess amount of Rs.3,10,000/- into his bank account over and above the cash withdrawn. Therefore, in the present facts and circumstances of the case, we are of the view that, the assessee has failed to explain the source to the extent of Rs.3,10,000/- and hence confirm the addition of the same as unexplained