SATYA PATTABHIRAM THAKASI,ANAKAPALLI vs. INCOME TAX OFFICER, WARD-1, ANAKAPALLE

PER DUVVURU RL REDDY, Judicial Member :

2 2. Briefly stated the facts of the case are that the assessee is an individual and deriving income by way of commission from real estate business and interest income. The assessee filed his return of income for the AY 2017-18 on 16/12/2017 admitting a total income of Rs. 3,84,000/-. Subsequently, the case was selected for limited scrutiny under CASS to examine the cash deposits made by the assessee in his bank account(s) during demonetization period. Accordingly, notice U/s. 143(2) of the Act was issued to the assessee on 14/08/2018 and duly served on the assessee. Thereafter, a notice U/s. 142(1) of the Act was issued and served on the assessee and called for certain information. As there was no response from the assessee, a show cause notice was issued on 14/12/2019. In reply, the assessee furnished the information ie., copies of bank account statements, cash book, ledger extracts, confirmation letters etc., for verification. During the assessment proceedings, the assessee was asked to explain the sources for the cash deposits of Rs. 17,84,000/- made by the assessee in his bank accounts held with State Bank of India, The Federal Bank and Bank of India. However, the Ld. AO observed that the assessee could not explain the sources for cash deposits of Rs. 2,09,108/- made in Federal Bank towards payment of Gold Loan. In the absence of any 3 proper explanation, the Ld. AO treated the cash deposits to the extent of Rs. 2,09,108/- as unexplained cash deposits in the hands of the assessee U/s. 69A of the Act and added the same to the total income of the assessee. Thus, the Ld. AO determined the total income of the assessee at Rs. 5,93,108/- which includes addition of Rs. 2,09,108/- towards unexplained cash deposits. Aggrieved by the order of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A).

3. On appeal, after considering the submissions of the assessee, the Ld. Addl/JCIT(A), Panaji dismissed the appeal of the assessee by holding that “the assessee has not furnished any satisfactory explanation supported by cogent material evidence even during the appellate proceedings, it is held that there is no infirmity in the assessment order as such addition of Rs. 2,09,108/- U/s. 69A r.w.s 115BBE as unexplained cash deposits are upheld”. Aggrieved by the order of the Ld. Addl/JCIT(A), Panaji, the assessee is in appeal before the Tribunal by raising the following grounds of appeal:

“1. That the Ld. Addl/JCIT, Panaji erred in upholding the order of eth Ld. AO and not allowing the source of the deposits, ignoring the facts are bad in law and arbitrary.

4 2. That the Ld. Addl/JCIT(A) erred in confirming the addition of 2,09,108/- made by the Ld. AO though the appellant had adduced the evidences and explained the source of deposits in.

5. That the appellant craves leave to add/alter any of the grounds of appeal on or before the time of hearing.”

4. At the outset, the Ld. AR for the assessee submitted that the Ld. Addl/JCIT(A)’s decision in confirming the addition of 2,09,108/- made by the Ld. AO is not in accordance with law as the appellant had adduced the evidences and explained the source of deposits. The Ld. AR further submitted that before the Ld. Revenue Authorities it was explained by the assessee that the deposits of Rs. 2,09,108/- were made before demonetization period and the sources for the same were also explained. However, the Ld. Addl/JCIT(A) did not consider the submissions of the assessee and confirmed the addition made by the Ld. AO. The Ld. AR therefore pleaded that the addition may be deleted.

5 6. I have heard both the sides and perused the material available on record as well as the orders of the Ld. Revenue Authorities. On perusal of the Ld. Addl/JCIT(A) order, I find that, vide page-7 of the Ld. Addl/JCIT(A) order, it is appears that the assessee has provided the details of date wise cash deposits with respect to disputed cash deposit of Rs. 2,09,108/-. It is also apparent from the said details that the assessee has made the cash deposits between 13/06/2016 to 21/07/2016 whereas the demonetization was announced on 08/11/2016 and continued till 30/12/2016. Therefore, I am of the view that the alleged deposits of Rs. 2,09,108/- are not during the demonetization period and they were made much prior to the demonetization period for the purpose of repayment of Gold Loans in Federal Bank. Further, I also find that while furnishing the details of cash deposits, the assessee has also submitted the copy of the cash book before the Ld. Addl/JCIT(A). However, the Ld. Addl/JCIT(A) without considering these facts dismissed the appeal of the assessee. In this situation, I am of the considered view that the assessee made the alleged cash deposits prior to the period of demonetization and properly explained the cash deposits of Rs. 2,09,108/-. Hence, the disallowance made by the Ld. AO is not warranted and the Ld. Addl/JCIT(A) is also not correct in 6 upholding the decision of the Ld. AO. Therefore, I hereby direct the Ld. AO to delete the addition of Rs. 2,09,108/- made U/s. 69A r.w.s 115BBE of the Act. It is ordered accordingly.

Pronounced in the open Court on 27th August, 2024.