The Income Tax Appellate Tribunal (ITAT) Ahmedabad has held that when the deposit on the bank with the demonetized currency during the demonetization period was proved with the bank statement the addition under section 69A of the Income Tax Act is not sustainable.
The appellant was represented by Ms Arti N Shah and the respondent was represented by Sudhiksha Rani.
The assessee,Kavitaben Chintanbhai Patel filed her Return of Income for the Assessment Year 2017-18 admitting a gross total income of Rs. 4,07,922/- which comprises of salary income of Rs. 3,60,000/-, the income from other sources of Rs. 47,922/-.
The assessee deposited in old currency notes of Rs. 2000 and Rs. 500/- on a sum of Rs. 10,00,000/- on 11.11.2016 and 15.11.2016 cash of Rs. 2,75,000/-. It was stated by the assessee that the cash deposited during the demonetization period was from the cash withdrawn on 2.01.2014.
The AssessingOfficer added thecash deposit amounting to Rs. 12,75,000/-as unexplained money u/s. 69A of the Income Tax Act and the assessed income as Rs. 15,26,590/- and demanded tax.
TheNational Faceless Appellate Centre (NFAC) on appeal confirmed the addition made by the Assessing Officer as the assessee has neither provided sufficient evidence for justification before the A.O. during the appellate proceeding.
It was observed that the cash loan of Rs. 50,00,000/- said to be received by the assessee from Ramesh Corporation wasreflected in the bank account of the assessee and had withdrawn Rs. 50,00,000/- on 02.01.2014.
Further, the submission of redeposit of a sum of Rs. 37,00,000/- in her bank account of Bank of Baroda was also reflected in the bank statement. The remaining cash in hand of Rs. 12,78,000/- in which the assessee deposited Rs. 12,75,000/- during the demonetization period was explained clearly by the assessee that the demonetized currency notes of Rs. 500/- and Rs. 2000/- available with her as cash in hand were being deposited during the demonetization period.
Ms Annapurna Gupta, Accountant Member and Shri T.R. Senthil Kumar, Judicial Member observed that the source of withdrawal of the money was demonstrated and their deposit of money on various occasions was established by the assessee through her bank account. The Tribunal while allowing the appeal filed by the assessee deleted the impugned addition made by the Assessing Officer of Rs. 12,75,000/- u/s. 69A of the Act.
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