P DURGA VENKATA MANGATAYARU,VISAKHAPATNAM vs. INCOME-TAX OFFICER, WARD-4(5), VISAKHAPATNAM

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ITA 161/VIZ/2021Status: DisposedITAT Visakhapatnam26 May 2022AY 2017-186 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal found no merit in the assessee's argument that the cash deposit was from earlier withdrawals. The Tribunal noted the deposit was in two phases after demonetization and lacked cogent evidence to support the explanation, upholding the lower authorities' orders.

What were the facts?

The assessee deposited Rs. 10,84,000/- in cash during the demonetization period. The Assessing Officer treated this deposit as unexplained money, and the CIT(A) upheld this order. The assessee claimed the cash was withdrawn from fixed deposits in 2015 and kept for a property purchase that did not materialize.

What were the issues?

Whether cash deposits made during the demonetization period, allegedly from prior withdrawals, can be treated as unexplained money without sufficient evidence.

Which sections of the Income-tax Act were involved?

Section 69A

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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM

Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE

Hearing: 09/05/2022

Per contra, the Ld. DR questioned the necessity of holding such huge cash balance for a period of 17 months. The Ld. DR also pointed out to the fact that the assessee has deposited the cash subsequent to the announcement of demonetization in two installments which was also admitted by the Ld. AR. The Ld. DR argued that in the normal circumstances, it is an undisputed fact that each and every citizen wished to deposit the entire cash into the bank account in the first instance itself, consequent to the announcement of demonetization. The Ld. DR also supported the orders of the authorities below.

5.

We have heard both the sides and perused the material available on record and the orders of the Authorities below. The admitted facts are that the assessee has withdrawn cash out of the matured Fixed Deposits on 10/07/2015. We find that in the instant case, the assessee has deposited Rs. 2.50 lakhs on 16/11/2016 and Rs. 10.84 lakhs on 5/12/2016 in two phases. The ratio laid down in K. Sreedharan (supra) and co-ordinate benches cited by the Ld.AR is not relevant in the instant case as facts are distinguishable from the instant case where the cash deposit is in two phases consequent to demonitisation. We find merit in the argument of Ld. DR that subsequent to demonetization every citizen of the country rushed to deposit the money into their bank accounts as early as possible. There is also no cogent evidence provided by the Ld. AR that the cash withdrawn from savings account on 10/07/2015 was deposited on 5/12/2016. In the absence of a reasonable explanation and the necessity of depositing the cash in two phases, we find no merit in the arguments of the Ld. AR that it is out of the cash withdrawals of earlier years which was deposited into the bank account of the assessee consequent to the demonetization announced by the Government of India. We therefore find no infirmity in the order of the Ld. CIT(A) and in our opinion no interference is required in this regard.

6.

In the result, appeal of the assessee is dismissed.

Pronounced in the open Court on the 30th May, 2022.

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