SUBAIR KUNNATH,KOZHIKODE vs. ITO, WARD-2, KOZHIKODE

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ITA 826/COCH/2023Status: DisposedITAT Cochin07 November 2024AY 2017-18Bench: SHRI SATBEER SINGH GODARA (Judicial Member), SHRI AMARJIT SINGH (Accountant Member)3 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee had attempted to attribute the source of his cash deposits by showing prior withdrawals. Although the re-deposit claim was rejected, it was not an instance of complete failure to attribute the source.

What were the facts?

The assessee made cash deposits of Rs. 24.50 lakhs during demonetization. The assessee claimed these deposits were re-deposits of cash withdrawn earlier from his NRE account, but this was rejected by the lower authorities.

What were the issues?

Whether the penalty under Section 271AAC(1) is leviable when the assessee attempts to explain the source of cash deposits, even if the explanation is not fully accepted.

Which sections of the Income-tax Act were involved?

Section 271AAC(1),Section 115BBE(1)(i)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN

Before: SHRI SATBEER SINGH GODARA & SHRI AMARJIT SINGH

For Respondent: Smt. V. Swarnalatha, Sr. DR
Hearing: 16.08.2024Pronounced: 07.11.2024

Assessment Year - 2017-2018 Subair Kunnath, Kunnath Aaderi Income Tax Officer, Arikulam, KOYILANDI vs. Ward-2(2), PIN - 673 326 KERALA. KOZHIKODE. KERALA. PAN DCYPS7474D (Appellant) (Respondent) Assessee by : -None- Revenue by : Smt. V. Swarnalatha, Sr. DR Date of Hearing : 16.08.2024 Date of Pronouncement : 07.11.2024 ORDER PER BENCH : This assessee’s appeal, for the assessment year 2017- 2018, arise against the order of the learned CIT(A)-NFAC vide DIN & Order No.ITBA/NFAC/S/250/2023-24/1056292382(1) dated 20.09.2023, in proceedings u/s.271AAC of the Income-tax Act, 1961; in short “the Act”.

2 ITA.No.826/Coch./2023 Case called twice. None appeared at assessee’s behest. He is accordingly proceeded ex-parte.

2.

We find during the course of hearing with the valuable assistance coming from the Revenue sie that both the learned lower authorities have imposed sec.271AAAC(1) penalty of Rs.1,47,000/- @ 10% of the tax(s) payable u/sec.115BBE(1)(i) of Rs.14,70,000/- qua his cash deposits of Rs.24.50 lakhs made during demonetization.

3.

Smt. Swarnalatha, learned DR has vehemently supports the impugned penalty levied in assessee’s hands.

4.

We find in this peculiar backdrop that even the learned CIT(A)-NFAC is indeed very fair in making it clear in para(s) 6.4 to 6.5 pages 5 and 6 that the assessee had indeed withdrawn cash from his Axis Bank NRE account in the month of June and July 2016 which followed alleged re-deposits after four to five months thereof during demonetization in November, 2016. We invited the Revenue’s attention to the impugned lower appellate discussion to this effect which sufficiently prove that it is not an instance of the 3 ITA.No.826/Coch./2023 assessee having failed to attribute source of his cash deposits in entirety since his endeavour to treat his withdrawals as re-deposits herein, only has been rejected. Faced with this situation, we conclude that the impugned sec.271AAC(1) penalty of Rs.1,47,000/- deserves to be deleted. Ordered accordingly.

5.

This assessee’s appeal is allowed in above terms.

Order pronounced in the open court on this 7th day of November, 2024.

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