Guneet Kaur Chadha Vs ITO (ITAT Delhi)
Earlier Withdrawals = Explained Source: Section 69A Addition Quashed- No Evidence of Diversion, Cash Balance Proven—115BBE Addition Removed
Assessee filed ROI declaring income of ₹16,88,110. During demonetization, she deposited ₹25,00,000 (11-11-2016) & ₹4,000 (22-11-2016) in specified bank notes. AO held that the explanation for source was not satisfactory & made an addition of ₹25,04,000 u/s 69A r.w.s. 115BBE, which CIT(A)/NFAC confirmed.
Assessee explained that she had accumulated cash from substantial withdrawals during FY 2015-16 & 2016-17, intending to renovate her third-floor residence at 190, Jor Bagh, for which builder quotations were also filed. Renovation required temporary shifting & consensus of all 4 floor-owners; negotiations failed, so the plan was dropped. With demonetization announced on 08-11-2016, she redeposited the unutilised cash.
Tribunal examined bank statements, statement of affairs & cash-flow pattern. Assessee had:
- Withdrawn ₹46,80,000 (UBI Punjabi Bagh) & deposited ₹16,50,000 in FY 2015-16;
- Withdrawn ₹28,51,500 (UBI Kashmere Gate) & deposited ₹65,000 in FY 2015-16;
- Shown cash-in-hand of ₹54,41,148 as on 31-03-2016 (Statement of Affairs).
Tribunal held that assessee’s consistent pattern of cash withdrawal & redeposit, coupled with a credible & documented reason (home renovation), established a proper explanation. Revenue did not show that the withdrawn cash was utilized elsewhere. Hence earlier withdrawals constituted a valid cash source to explain the demonetization-period deposits.
