Senior Citizen’s Explained Cash Deposits Cannot Be Treated Unexplained: ITAT Ahmedabad

Yogini Sureshkumar Shukla Vs ITO (ITAT Ahmedabad)

Summary: ITAT Ahmedabad allowed the assessee’s appeal for AY 2017-18 and deleted the entire addition of Rs.10,60,000/- made on account of cash deposited in her bank account during the demonetisation period. The assessee had filed her return on 24.03.2018 declaring total income of Rs.2,67,040/-. Her case was selected for scrutiny under CASS, and the Assessing Officer, being dissatisfied with the explanation regarding the source of cash deposits of Rs.10,60,000/-, treated the deposits as unexplained and completed the assessment under section 143(3) on 31.10.2019 at total income of Rs.13,27,040/-. The Addl./JCIT(A) dismissed her first appeal. Before the Tribunal, the assessee challenged the addition of Rs.10,60,000/- as unexplained money under section 69A, the computation of tax at 60% under section 115BBE, and initiation of penalty proceedings under section 271AAC(1).

The assessee explained that she was a senior citizen residing alone in Ahmedabad and that both her sons were residing in the USA. Her husband had expired on 15.10.2016. After his death, she came to know about a joint bank account held with him, from which she withdrew Rs.2,50,000/- and retained the amount in cash. She explained that, being a widow and senior citizen living alone in India and not conversant with banking transactions, she preferred to keep cash with herself. Her two sons also gave her cash during their visits to India for personal expenses and repairs to the house. According to the assessee, the cash deposited during demonetisation represented her past savings, withdrawals from bank accounts and gifts received from her sons. The Revenue contended that there was no nexus between the earlier cash withdrawals and the subsequent deposits and that the alleged cash gifts from the sons were not substantiated.