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Facts
The assessee deposited cash of Rs. 15 lakhs during the demonetization period. The Assessing Officer treated this as unexplained investment and made an addition. The CIT(A) upheld the addition.
Held
The Tribunal noted that the cash deposit originated from a personal loan taken by the assessee for a medical emergency. The cash remained unutilized and was later deposited. The Tribunal found the explanation satisfactory and the money trail duly established.
Key Issues
Whether cash deposited during demonetization period, sourced from personal loan for medical emergency, constitutes unexplained investment.
Sections Cited
69A, 15BBE, 143(2), 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “SMC’’ : NEW DELHI
Before: SHRI MAHAVIR SINGH, HON’BLE
ORDER This appeal by the assessee is emanating from the order of the Ld. Addl/JCIT(A)-1 Thane, dated 18.07.2025 pertaining to assessment year 2017-18 on the solitary ground relating to sustaining the addition of Rs. 15,00,000/- made by the AO u/s. 69A of the Act by treating the cash deposit as unexplained investment.
The brief facts of the case are that the appellant, Mr. Prakash Kumar, is a resident individual. The appellant filed a return of income for the A.Y. 2017-18 on 24.07.2017, declaring total income of Rs. 30,48,160/-. The case was selected for scrutiny through CASS under "Limited Scrutiny” due to reasons 'Salary income and cash deposit and transaction in property". Notice u/s 143(2) dated 20.08.2018 was issued and served upon the assessee. Thereafter, the file of the appellant was received on transfer from Ward 65(4), Delhi and a further notice u/s 142(1) dated 06.09.2019 and 06.12.2019 were issued to the appellant. In response to these notices, the appellant filed the necessary details as called on ITBA, which are placed on record. During the year under consideration, the appellant derived income from Salary and income from other sources. As per information available on system and bank statement, the appellant has deposited cash of Rs. 15 lakhs during the demonetization period in his bank Yes Bank. Regarding source of such cash deposit in his bank account the appellant has filed documentary evidence to substantiate his claim of savings which was not acceptable. A show cause notice was issued. In response to show cause notice the appellant filed his reply online on 17.12.2019. The appellant submitted that the cash deposited in his bank account during the demonetization period. It was noticed that the appellant had kept this cash for medical purpose for his father's ailment was not acceptable as appellant lives in Delhi NCR where most of the medical hospitals accepts online payment and need to keep large cash at home for this purpose was not a valid reason. Moreover, the appellant himself is a medical practitioner working in a renowned hospital and in any emergency, he could get the treatment easily. Further, as per medical papers submitted by the appellant, his father was discharged from the treatment in April 2016 itself and after that keeping cash for this purpose was not logical. The AO treated the same as disclosed income and completed the assessment proceedings making addition of undisclosed income of Rs. 15,00,000/- on account of unexplained money u/s. 69A of the Act and added the same to the total income of the assessee and taxed u/s. 15BBE of the Act. Aggrieved, Assessee preferred the appeal before the CIT(A), who had confirmed the action of the AO. Against the above, assessee filed the appeal before the Tribunal.
Ld. AR for the assessee submitted that Appellant has taken a personal loan of Rs. 20,00,000/- on dated 02-03-2016 from the Yes Bank. Due to the Medical Emergency of the father of the appellant, he withdraw cash amounting to Rs. 15,00,000/- on dated 03-03-2016. The cash remained unutilized as the expenses relating to the Medical Emergency were incurred by the other family members. The cash was lying at Home only as the appellant and his wife remained busy in their profession and keeping in few any further possible Medical Emergency, it was not deposited in the Bank. As per the summary cash book submitted, the this cash was available with the appellant as on 01-04- 2016 was Rs. 15,54,370/-. After the announcement of the demonetization on 08-11-2026, out of the cash in hand available in the old currencies was deposited in the bank on 13-11-2016 amounting to Rs. 15,00,000/-.
Ld. DR relied upon the orders of the authorities below.
After hearing both the sides and perusing the records, I note that the Ld. AR has submitted that appellant, Dr. Prashant Kumar, is an individual professionally qualified as a Doctor and employed full-time as a salaried professional in a Private Hospital, a regular tax payer for over 20 years, filed his return of income declaring income Rs. 36,38,358/- from salary and he is maintaining Bank Account No. 000298700000671 with Yes Bank, Gurugram Brank. During the period of Demonetization, on dated 13-11-2016, a cash deposits of Rs. 15,00,000/-were made into this bank account in two parts of Rs. 9,00,000/- and Rs. 6,00,000/-. During the course of the assessment the assessee explained the source of the cash deposited in the bank as under: a. The deposits were from personal loans availed from Yes Bank (Four loans of Rs. 5,00,000/- each totaling Rs. 20,00,000/-), credited to his account on 02-03-2016. The details of such loans taken are furnished as under along with the copies of the sanction letter: Date of disbursement Loan A/c No. Amount (Rs.) 02/03/2016 PLN000300107883 5,00,000/- 02/03/2016 PLN000300107886 5,00,000/- 02/03/2016 PLN000300107887 5,00,000/- 02/03/2016 PLN000300107888 5,00,000/- b. It was submitted that the father of the assessee, Mr Jugal Kishore was diagnosed with heart disease in February, 2016 and was advised surgery. The assessee withdrew cash of Rs. 15,00,000/-out of the said loan and kept it at home to meet any medical emergency. The father of the assessee was admitted in Medanta Hospital, Gurgaon, Haryana on 03.04.2016 and got operated on 06.04.2016 and was discharged from the hospital on 13.04.2016. Copy of treatment papers and discharge report are placed on record, which I have perused carefully. It was further submitted that the expenses incurred on hospital bill were borne by the family members of the assessee including father of the assessee and thus, the 3 | P a g e money of the assessee remain unutilized and kept at home just for the sake of emergency purpose. The fact may be verified from the summary of the cash book already submitted during the course of the first appeal. (Copy of the cash summary placed at page number 72-73). It is undisputed that when demonetization was announced on 8th November, 2016 and assessee deposited the unutilized cash available with him in the bank in the form of old currency notes. On perusal of the bank account, it would be seen that the cash deposit in the bank account is preceded by withdrawal of more amount of money. Thus, cash withdrawn from the bank was available with the assessee to deposit the same in the bank account. It was submitted that on 30-11-2016, the same deposited amount was immediately utilised to repay his outstanding personal loan liability of Rs. 18,57,924. (Bank Account is enclosed at page number 79 at the middle of the page) also (Copy of the loan clearance certificate is enclosed at page number 59-82). The entire money trail from loan sanction to withdrawal, cash deposit, and loan repayment is duly established through bank records with the documentary evidences. It was further submitted that the AO even did not considered the cash book in the summary form which shows the outstanding cash balance as on 01-04-2016 amounting to Rs.
15,54,370/-. In view of above, I find considerable cogency in the aforesaid contentions of the Ld. AR for the assessee that appellant has taken a personal loan on 2.3.2016 and due to medical emergency of the father of the assessee, assessee withdrawn cash amounting to Rs. 15,00,000/- on 3.3.2016 and the said cash remained unutilized as the expenses relating to the medical emergency were incurred by the other family members and as per the summary cash book, this cash
4 | P a g e was available with the assessee on 1.4.2016 was Rs. 15,54,370/-. The aforesaid factual matrix, clearly justifies the genuine reasons for depositing the amount in the bank on 13.11.2016 and therefore the same is fully explainable and addition of Rs.
15,00,000/- needs to be deleted. I hold and direct accordingly and allow the grounds raised by the assessee.