Ananthaiah Roopa Vs ITO (ITAT Bangalore)
Cash Deposits During Demonetisation Explained by Earlier Withdrawals for House Construction – Addition u/s 69A Deleted – Revision u/s 264 Does Not Bar Appeal – ITAT Bangalore
Assessee, an individual engaged in small tailoring work, faced addition of ₹13.66 lakh u/s 69A for cash deposits made during the demonetisation period (Nov–Dec 2016). The AO passed best-judgment assessment u/s 144 after observing that the assessee had not filed return and had deposited cash in bank during demonetisation.
The assessee’s appeal before CIT(A)/NFAC was dismissed as not maintainable, holding that the assessee had earlier filed a revision petition u/s 264 before PCIT and therefore could not subsequently pursue the appellate remedy.
Before ITAT, the Tribunal first condoned delay in filing appeal considering the assessee’s medical condition (arthritis) and applied the principle that substantial justice should prevail over technicalities. The Tribunal further held that invoking revision u/s 264 does not bar the assessee from filing an appeal, particularly when revision fails, relying on the Madras High Court decision in CIT v. D. Lakshminarayanapathi.
On merits, the assessee explained that the cash deposited during demonetisation represented earlier withdrawals for construction of a house on a site received as gift from her mother. The funds were sourced from housing loan, gold loan, family loans and savings, and bank statements showed withdrawals of about ₹11.30 lakh immediately before demonetisation .
ITAT found that the withdrawals were duly supported by bank statements, loan documents and confirmations, and that the AO had made the addition purely on presumptions without proper verification. Accordingly, the Tribunal deleted the entire addition u/s 69A
FULL TEXT OF THE ORDER OF ITAT BANGALORE
