Malti Garg Vs ITO (ITAT Chandigarh)
Conclusion: Cash deposits made by assessee during the demonetization period were explained as being sourced from earlier withdrawals and household savings, and deleted the addition of ₹10,46,500 made under section 69A.
Held: Assessee was a senior citizen, had deposited ₹10,46,000 in specified bank notes into her bank account during November 2016 and was subjected to scrutiny for the Assessment Year (AY) 2017-18. AO treated the deposits as unexplained money under section 69A on the ground that assessee had failed to substantiate the source of cash. On appeal, CIT (Appeals) upheld the addition and held that assessee had not demonstrated that the deposits were out of genuine sources. Before Tribunal, assessee contended that she had regularly withdrawn substantial sums in cash from her bank account before demonetization, along with her accumulated household savings, explaining the availability of sufficient cash in hand. Assessee also produced the bank passbooks and withdrawal entries to substantiate the claim. It was held that AO had ignored the pattern of earlier withdrawals, which showed that an adequate cash balance was available with the assessee at the time of deposit. Tribunal held that the assessee had explained the source through banking records and the explanation was reasonable. Therefore, the deposits could not be treated as unexplained under section 69A. Accordingly, Tribunal concluded that the cash deposits made during the demonetization period were explained and deleted the addition of ₹10,46,500 made under section 69A.
