Bhikhabhai Mangalbhai Patel Vs ITO (ITAT Ahmedabad)
Brief facts:
The assessee appealed against the order of CIT(A), NFAC, confirming an addition of ₹15,00,000 as unexplained cash deposit under Section 68 / 69A. The deposits were made in three separate bank accounts in November 2016.
The assessee submitted:
- On 18.07.2016, he had withdrawn exactly ₹5,00,000, ₹7,00,000, and ₹3,00,000 from the same respective bank accounts.
- The cash was withdrawn for house construction, but since the project did not materialize, the amount was re-deposited four months later into the same accounts.
The bank statements were produced showing a clear one-to-one nexus between withdrawal and corresponding re-deposit.
CIT(A) disregarded the explanation and sustained the addition.
ITAT Findings:-
The Tribunal carefully examined:
- The dates and amounts of withdrawals,
- The dates and amounts of deposits, and
- The fact that deposits matched earlier withdrawals from the same accounts.
Key observations
1. Withdrawals preceded deposits and were from the exact same accounts.
2. The assessee’s explanation that the funds were intended for construction, but later re-deposited, was plausible and consistent with the documents.
3. The Revenue brought no evidence to disprove the availability of cash withdrawn earlier.
4. A time gap of four months between withdrawal and re-deposit does not, by itself, justify an addition, where the assessee demonstrates a reasonable explanation supported by records.
Held:-
