Anubhav Kumar Vs ITO (ITAT Ranchi)
The case of Anubhav Kumar vs. Income Tax Officer (ITO) before the Income Tax Appellate Tribunal (ITAT), Ranchi, centered on a disputed addition to the assessee’s income for the Assessment Year 2017-2018. The Income Tax Department selected Anubhav Kumar’s case for limited scrutiny after he deposited cash totaling ₹10,42,000 during the demonetization period between November 9, 2016, and December 31, 2016.
The Assessing Officer (AO) rejected the assessee’s explanation and added the entire cash deposit of ₹10,42,000 to his income under Section 69A of the Income Tax Act, 1961, which deals with unexplained money. The assessee’s initial appeal to the Commissioner of Income Tax (Appeals) [CIT(A)] was also unsuccessful. Although the CIT(A) acknowledged that the assessee had withdrawn ₹14,50,800 from his bank accounts during the same year, he did not grant any relief. The CIT(A) reasoned that the assessee failed to adequately justify why a large amount of cash was kept on hand and then deposited specifically during the end of the demonetization period.
The assessee then appealed to the ITAT Ranchi. The assessee’s representative argued that since the CIT(A) admitted the fact of significant withdrawals, it was illogical to deny that the cash deposits came from these withdrawals. The argument highlighted that the Income Tax Act does not dictate how an individual manages or holds their cash. Unless the department could prove that the cash came from an undisclosed or alternative source, the addition could not be sustained. The department’s senior departmental representative (Sr.DR) supported the lower authorities’ decisions but couldn’t provide evidence to counter the assessee’s claim that the cash came from the withdrawals.
