SRIVASTSA SAI KARTHIK KAMMITI,HYDERABAD vs. ITO., WARD-4(4), HYERABAD.

The brief facts of the case are that the assessee is an individual, filed his return of income for the A.Y 2017-18 on 27.9.2017 declaring total taxable income of Rs.3,88,570/- . The case was selected for scrutiny under CASS with the reasons to examine the issue “cash deposit during demonetization period”.

Being aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT (A). Before the learned CIT (A) the assessee reiterated the arguments made before the Assessing Officer and submitted that the source for cash deposits is out of his known source of income declared for earlier A.Ys. The appellant further submitted that he is an unmarried person living with his parents and his day-to-day expenses are taken care by his family. Therefore, the income declared for earlier A.Ys was available with the assessee and the same has been deposited into bank accounts. The learned CIT (A) after considering the relevant submissions of the assessee and also taken note of relevant bank statements observed that although the assessee claims to be Page 2 of 6 living with his parents and all his expenses are taken care by the family, but on perusal of the bank statement of the appellant, it is noticed that the assessee has spent huge amount towards tickets booking and other purchases. A person cannot maintain a lifestyle without any expenditure incurred by himself and therefore, the argument of the assessee that the income earned by him in earlier years is not spent for any expenditure and the same was available to explain the cash deposits to bank account is contrary to the theory of human probability and therefore, rejected the explanation of the assessee and sustained the addition made towards cash deposits u/s 69A of the I.T. Act, 1961.

Aggrieved by the order passed by the learned CIT (A), the assessee is in appeal before the Tribunal.

The learned Counsel for the assessee submitted that the learned CIT (A) is erred in sustaining the addition made by the Assessing Officer towards cash deposits without appreciating fact that the assessee has filed all the details and also explained the source for cash deposits, therefore, he submitted that the addition made by the Assessing Officer should be deleted.

The learned DR, on the other hand, supporting the orders of the authorities below submitted that the assessee could not explain the source for cash deposits with relevant evidences

I have heard both the parties, perused the material available on record and gone through the orders of the authorities below. There is no dispute with regard to the fact that the appellant has made cash deposits of Rs.11,86,500/- into 3 bank accounts during demonetization period. The appellant explained the source for cash deposits out of income declared for earlier A.Ys and claimed that his past saving is sufficient to explain the cash deposits during demonetization period. I find that the appellant has filed income tax return for A.Y 2015-16 to A.Y 2017-18 and declared total taxable income of Rs.9,83,310/-. I further note that the appellant claims to be residing with his parents and all his day-to-day expenses are taken care by his family. Although I am not fully agreeing with the argument of the assessee that his expenses are taken care by his family, but going by the general practices in joint families in India, the parents of unmarried children are taking care of their children’s day to day expenses. Therefore, to this extent, I am in agreement with the argument taken by the assessee that, his day-to-day expenses are partly taken by his parents.

In the result, appeal filed by the assessee is partly allowed.