Savitrivasudeva Govinda Rao Vs ITO (ITAT Bangalore)
Past Withdrawals Valid Source- Demonetisation Deposits Explained – ITAT Deletes 69A Addition for Retired 82-Year LIC Officer
Bangalore ITAT dealt with addition made on account of demonetisation cash deposits. Assessee, a retired LIC employee aged 82 years, had deposited ₹15.30 lakh in his savings account during November 2016. AO treated these deposits as unexplained money u/s 69A after accepting only part of his explanation, while CIT(A) upheld the addition on the assumption that withdrawals were made over several years since 2011, which could not reasonably explain deposits in FY 2016-17.
Before Tribunal, Assessee produced detailed evidence including bank passbooks, ledgers, cash book from 2012 to 2017 & affidavits from his two sisters. It was explained that both sisters, also senior citizens, had withdrawn cash in FY 2015-16 but could not personally visit their bank (10 km away) during demonetisation due to physical constraints. Hence, they entrusted the withdrawn amounts to the Assessee, who deposited them in his own account. Assessee contended that deposits were from past savings, retirement benefits & LIC maturity proceeds.
Tribunal accepted additional evidence & found that large cash withdrawals were indeed made in FY 2015-16, not stretched since 2011 as assumed by CIT(A). It observed that neither AO nor CIT(A) brought material to prove that the Assessee had any undisclosed income. Tribunal relied on Karnataka High Court in S.R. Venkata Ratnam v. CIT (127 ITR 807) which held that past withdrawals must be accepted unless Revenue proves otherwise. It also referred to its own rulings in Narayana Shibaroor Shibaraya & Girigowda Dasegowda, which recognized past withdrawals as valid sources for later deposits. Revenue’s reliance on Keshav Murthy case was distinguished since that case involved only small ATM withdrawals, unlike large identifiable withdrawals in the present case. Considering the peculiar facts – advanced age, genuine withdrawals, absence of other income sources, & corroboration by affidavits , Tribunal held that Assessee had satisfactorily explained the source of deposits. It accordingly deleted the entire addition of ₹15.30 lakh u/s 69A & allowed the appeal in full.
