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Facts
The assessee deposited Rs. 11,47,000 in her bank account during the demonetization period (November-December 2016). The assessee claimed the cash was from past withdrawals made in FY 2012-13 and 2013-14, kept at home for medical emergencies. The AO treated this as unexplained investment and added it to the total income.
Held
The Tribunal found that neither the assessee could properly explain the source of cash deposits nor could the department brush aside all evidence. In the interest of justice, the addition was confirmed at Rs. 47,000 instead of Rs. 11,47,000, providing relief of Rs. 11,00,000.
Key Issues
Whether cash deposits made during the demonetization period, claimed to be from past withdrawals for medical emergencies, are to be treated as unexplained investment and added to income. Applicability of Section 115BBE to the transaction.
Sections Cited
69A, 115BBE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “SMC’’ : NEW DELHI
Asstt. Year : 2017-18 Subashini Sood, vs. DCIT, NEW DELHI C-251, 6th floor, Defence Colony, New Delhi – 110 024 (PAN: AJSP8300A) (Appellant) (Respondent) Appellant by : Ms. Agni Choudhary, Adv. & Sh. Raghav Sharma, CA (Thru VC) & Sh. Rahul Agarwal, CA Respondent by : Shri Manoj Kumar, Sr. DR. Date of Hearing 04.09.2025 Date of Pronouncement 24.09.2025 ORDER This appeal by the assessee is emanating from the order of the Ld. Addl/JCIT(A)-2 Noida dated 05.10.2024 on the solitary ground relating to sustaining the addition of Rs. 11,47,000/- made by the AO u/s. 69A of the Act by treating the cash deposit as unexplained investment.
Brief facts of the case are that assessee filed her return of income on 23.10.2017, declaring a total income of Rs. 2,72,210/-. During the course of scrutiny assessment, the AO found that the assessee had deposited Rs. 11,47,000/- in her bank account during the demonetization period, specifically between November and December 2016. The AO, not being satisfied with the explanation provided regarding the source of cash deposits, treated the entire amount as unexplained money and added it to the total income of the assessee under section 69A of the Act. Consequently, the total income was enhanced to Rs. 14,19,210/-. and the same was taxed u/s. 115BBE @ 60%. However, in appeal, Ld. First Appellate Authority sustained the addition. Against the above, assessee appealed before the Tribunal.
After hearing both the sides and perusing the records, I note that it was contended that the cash deposits were made from past withdrawals specifically from the financial years 2012-13 and 2013-14, and that the money was kept at home for medical emergencies, given her age and health condition. The AO questioned the timing of the deposits. The cash was deposited on 17.12.2016, more than a month after demonization was announced. The AO argued that if the appellant indeed had such large cash reserves for emergencies, should have deposited the cash earlier, especially considering the urgency during the demonetization period. Additionally, the AO observed that the assessee made smaller withdrawals during the same period, which contradicted her claim of having substantial cash reserves. Ld. CIT(A), upheld the addition in dispute. However, it was the contention of the Assessee that assessee explained that the cash was accumulated from past withdrawals made in the earlier financial years,
2 | P a g e specifically from FY 2012-13 and FY 2013-14 and she kept the cash at home for medical emergencies, given her age and health condition as well as the fact that her sons lived abroad and advised her to maintain a reserve of cash for any unforeseen health related expenses. I have given my thoughtful consideration to the assessee’s contentions before the lower authorities and Revenue’s contention in support of the impugned addition. I find no reason to accept either parties stand in entirety. This is for the precise reason that neither the assessee has been able to properly explain the source of cash deposits nor the department could simply brush aside all the relevant evidence at one go. Be that as it may, the tribunal is of the considered view that in these peculiar facts, it is deemed appropriate in the larger interest of justice to confirm the impugned addition of Rs. 11,47,000/- to Rs. 47,000/- only with a rider that the same shall not be as a precedent. The assessee gets relief of Rs. 11,00,000/- in other words. Necessary computation shall follow as per law.
So far as assessee’s assessment u/s. 115 BBE of the Act is concerned, in view of Hon’ble Madras High Court in SMILE Microfinance Ltd. vs. ACIT in WP(MD) no. 2078 of 2020 & 1742 of 2020 dated 19.11.2024 (Mad.) has already settled the issue against the department that the law applies to the transaction on or after 01.04.2017 only.