Girigowda Dasegowda Vs ITO (ITAT Bangalore)
Hon’ble Karnataka High Court in the case of Smt. P. Padmavathi Vs. The ITO ITA No.414 of 2009 judgment dated 06.10.2010 clearly laid down that earlier withdrawals of cash from Bank account have to be accepted as available to an assessee to explain a later deposit as source. The Hon’ble Court held that it was not open to the Revenue to contend that the assessee has to explain as to how the cash withdrawn earlier was utilized by an assessee and was still available with the assessee. The decisions cited by the learned DR are contrary to the law laid down by the Hon’ble Karnataka High Court and therefore not binding. I, therefore, hold the past withdrawals as claimed by the assessee from 2013 should be considered as being available to the assessee to explain the source of deposit. We are also of the view that a reasonable quantum of cash available out of past savings should also be considered as being available to the assessee to explain the source of cash deposited in the bank account.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
This is an appeal filed by the assessee against order dated 24.09.2021 of National Faceless Appeal Centre (NFAC), Delhi, relating to Assessment Year 2017-18.
2. The assessee is an individual. His source of income is pension from Vijaya Bank where the assessee worked prior to retirement, interest income on bank deposits. He filed return of income for Assessment Year 2017-18 declaring total income of Rs.4,40,450/-. The return of income was taken up for scrutiny because the assessee had deposited cash of Rs.28,28,000/- in two bank accounts in his name with Bank of Baroda. The deposit was made during the demonetization period.
3. The assessee explained the source of funds as earlier cash withdrawals from the very same bank accounts, withdrawals from FD and pension account. The AO disbelieved the plea of the assessee for the following reasons:
“8. As per assessee’s letter itself, he has claimed that he had witharawn total amount of Rs.18.67.500/- from Oct. 201310 08.11.2016. whereas he has deposited total amount of Rs. 28,28,000/-during the period of demonetization.
The assessee has stated that cash deposited during the demonetization period is out of previous withdrawals only, which includes pension, bank interest , PF & Gratuity, Leave en-cashment and commuted that have been deposited in bank. However, the assessee failed to produce documentary proof/evidence to prove that the above benefits were withdrawn from banks in cash and the same amount was deposited during the demonetization period. Further it is also seen that he had invested Rs.15,00,000/- (Account No. (Vijay Bank) 128602061000233/234/235 ) in Fixed Deposited on 19.10.2013 out of the “PF Commutation and gratuity” and is receiving interest on the same. The Bank interest declared for AY 2017-18 is at Rs.1,09,219/-.
In view of the above. assessee’s claim that he had deposited the cash, out retirement benefits is not acceptable and is without any supporting evidences.
9. The assessee has claimed that all the expenses related to him are borne by his sons and all the cash withdrawn by him has been deposited by him into his bank accounts during the period of demonetization. Bank statement of Account No. -128601021000016 for the period Sept, 2013 to demonetization period has been perused and it has been seen that there are no major withdrawal in the said bank account during the year. Further there have cash deposits and withdrawal all through the year, which shows that assessee, was not having huge cash balance at home with him. If that was the case, no bank withdrawal would have been made just before the period of demonetization. However considering the average need of person to maintain cash at home for medical contingency and bank withdrawals made during the year, the cash in hand as on 08.11.2016 is taken at Rs.5,00,000/-. Hence the balance cash deposited in bank accounts during the demonetization period at Rs.23,28,000/- remains unexplained at assessee’s hands.”
4. The AO therefore after giving credit for Rs. 5 lakhs added a sum of Rs.23,28,000/- as unexplained money deposited in bank account under section 69A of the Income Tax Act, 1961 (Act).
5. On appeal by the assessee, the CIT(A) confirmed the order of the AO. On the plea of the assessee that earlier cash withdrawals from the two bank accounts are the source of funds for the cash deposit made in the bank account during the previous year, the assessee had relied on withdrawals from 13.09.2013 and 06.04.2015 but the CIT(A) considered withdrawals from only 06.04.2015 and 21.05.2015 respectively. The reasoning of the CIT(A) in this regard was as follows:
“5.11 From the above bank account it is seen that only few substantial withdrawals were made before 31.03.2016 (end date of demonetization period)
From account no. 128601021000016
