Malini Jignesh Doshi Vs ITO (ITAT Ahmedabad)
Assessee, an individual earning from tuition, rent & interest, deposited ₹17.63 lakh in her bank accounts during the demonetization period. AO treated the deposits as unexplained money u/s 69A, as no explanation or evidence was furnished, & taxed them u/s 115BBE. CIT(A), NFAC upheld the addition for want of compliance.
The appeal before ITAT was delayed by 313 days since Assessee’s earlier consultant failed to inform her about CIT(A)’s order. Applying Collector Land Acquisition v. Katiji (167 ITR 471) & N. Balakrishnan v. Krishnamurthy (1998) 7 SCC 123, Tribunal condoned the delay, holding that substantial justice should prevail over technicalities.
Assessee submitted that:
- Cash deposits were from earlier withdrawals of ₹10 lakh made in June–July 2016 from Mahila Vikas Co-operative Bank, &
- Past household savings & disclosed income of ₹7.63 lakh.
- She relied on Ajit Bapu Satam v. DCIT (147 taxmann.com 222), Ajay Data v. ACIT (171 taxmann.com 308), & Murlidhar Ice Cream & Sweet Parlour v. ITO (ITA 531/Ahd/2012), & cited CBDT Instruction No. 3/2017 requiring reasonable verification of redeposit explanations.
Tribunal’s Findings
- AO did not dispute the earlier cash withdrawals nor show that such cash was used elsewhere.
- In line with judicial precedents, redeposit of earlier withdrawals cannot be treated as unexplained unless contrary evidence exists.
- Assessee’s explanation was plausible & supported by records; the addition was made merely on presumption.
- CBDT’s instructions emphasize a rational & humane approach in demonetization-related cases.
- Addition of ₹17,63,000 u/s 69A was deleted in full.
Redeployment of earlier cash withdrawals during demonetization cannot be taxed u/s 69A absent proof of alternate use; CBDT’s fair-verification instruction & human-probability principle upheld.
