SANJIVA RAOK KUBEVOOR PRAKASH,COIMBATORE vs. ITO, NON CORPORATE WARD-3(1), COIMBATORE

The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of the AO in making addition of cash deposit made in Specified Bank Notes (SBNs) during demonetization period in savings bank account maintained with Syndicate Bank, Coimbatore amounting to Rs.29,46,000/-.

Brief facts are that the assessee’s case was selected for scrutiny assessment for verifying capital gain on sale of property and cash deposits made during demonetization period. The AO during the course of assessment proceedings noticed that the assessee has deposited a sum of Rs.29.46 lakhs on 15.11.2016 in savings bank A/c.No.65602010000808 maintained with Syndicate Bank, Vadavalli Branch, Coimbatore. The AO required the assessee to explain the source of cash deposit and assessee tried to explain that the cash of Rs.29,46,000/- was for sale of house property from M/s. Coimbatore Sree Mahaveer Welfare Society by writing a letter but the same was not replied. As the assessee could not explain the source of cash deposit made in SBNs during demonetization period on 15.11.2016 amounting to Rs.29,46,000/-, the AO treated the same as - 3 - unexplained u/s.69A of the Act and taxed u/s.115BBE of the Act. Aggrieved, assessee preferred appeal before CIT(A).

The CIT(A) also confirmed the action of AO as no details whatsoever was filed by the assessee before him. The relevant finding of the CIT(A) reads as under:- “The appellant contends that they submitted an Income & Expenditure Account, capital gains computation, and an explanation for the source of cash deposits during the demonetization period. However, a review of the assessment order and the appellant’s submissions reveals that while they did provide certain documents, they failed to furnish complete and consistent documentation. The Assessing Officer is required to make assessments based on the information and evidence available. In the absence of complete and consistent documentation, it is within the Assessing Officer’s discretion to proceed with the assessment based on the information at hand.”

Before me, the ld.counsel for the assessee drew my attention to the appeal set and particularly page No.59, wherein explanation is filed that the assessee has received sale proceeds by way of three cheques and deposited in assessee’s SB account in Syndicate Bank and withdrawn from that bank and gifted loan to various persons and those persons returned the money back to the assessee. He filed explanation at page 59 as under:-

- 4 - Out of the sale proceeds of the Joint property to M/s. Coimbatore Sree Mahaveer Welfare Society, my Share of Rs.35,00,000/- was received by way of three cheques. Out of the sale proceeds, I have transferred the amounts detailed below to some of my relatives by way of loan. Later when the Government unexpectedly announced the Demonitisation, they all returned the loan by way of cash since they were reluctant to deposit the same in their account. Hence I was left with no option but to deposit the above mentioned amount in my account. Since all know that the short period notice by the government regarding the demonitisation left a panic situation all over the nation, I too was not in a position to properly consult and do the transaction. Hence the cash deposit was done.

In the result, the appeal filed by the assessee is dismissed.