Subashini Sood Vs DCIT (ITAT Delhi)
Relief for Senior Citizen: ITAT Limits Cash Deposit Addition, Cites Madras HC Ruling on 115BBE
Assessee filed her return declaring income of Rs.2,72,210/-. During scrutiny, AO noticed cash deposits of Rs.11,47,000/- made in December 2016 during demonetization. Not satisfied with her explanation, AO treated the sum as unexplained money u/s 69A & taxed the same u/s 115BBE @ 60%, enhancing income to Rs.14,19,210/-. CIT(A) confirmed the addition.
Before Tribunal, it was argued that deposits came from past withdrawals made in FYs 2012-13 & 2013-14, kept at home for medical emergencies, particularly as the Assessee, an elderly lady with sons abroad, was advised to keep cash reserves. AO doubted the explanation since deposits were made after more than a month of demonetization & smaller withdrawals were simultaneously made.
Tribunal held that neither Assessee could fully establish the source of deposits nor the Department could completely reject her explanation. Considering peculiar facts & in interest of justice, it restricted the addition from Rs.11,47,000/- to Rs.47,000/- only, granting relief of Rs.11,00,000/-. Tribunal clarified that this order should not be taken as a precedent.
Further, on the issue of taxability u/s 115BBE, Tribunal noted that Madras High Court in SMILE Microfinance Ltd. Vs ACIT (WP(MD) 2078 & 1742/2020 dated 19.11.2024) held that the amended provisions apply only from 01.04.2017 onwards. Hence, 115BBE rate could not apply to AY 2017-18.
