Devadass Suresh Vs DCIT (ITAT Bangalore)
The Income Tax Appellate Tribunal (ITAT) Bangalore addressed an appeal by Devadass Suresh against the addition of Rs. 9,00,500, made by the Assessing Officer (AO) under Section 69A of the Income Tax Act, for cash deposits during the demonetization period. The AO had treated the deposits in the assessee’s Post Office savings account as unexplained money, citing the assessee’s failure to provide substantiation. The Commissioner of Income Tax (Appeals) [CIT(A)] upheld the addition. The assessee, a salaried individual, contended that the deposited cash originated from his mother’s savings, accumulated from her small shop, and his own past savings. He provided medical certificates indicating his mother’s serious illness, supporting the claim that the cash was kept at home for contingency purposes.
The ITAT, after reviewing the submitted documents, including affidavits from the assessee and his 77-year-old mother, accepted the explanation. The mother’s affidavit detailed that she had given Rs. 6,00,000 to her son for deposit, representing her lifetime savings, and that the remaining Rs. 3,00,500 was contributed by the assessee. The affidavits also indicated that the mother had later transferred a significant amount to a co-operative bank, further validating her claim of accumulated savings. Despite the assessee’s initial inability to provide proof during the lower authorities’ proceedings, the ITAT accepted the detailed explanations and supporting documents provided during the appeal. Consequently, the ITAT deleted the entire addition of Rs. 9,00,500, concluding that the cash deposited was adequately explained by the mother’s savings and the assessee’s contribution. The tribunal’s decision highlights the importance of considering detailed affidavits and supporting evidence in verifying the source of cash deposits, especially during periods of significant financial policy changes like demonetization.
