Case Law Details
Hemavathi Ramesh Vs ITO (ITAT Bangalore)
The Income Tax Appellate Tribunal (ITAT) Bangalore recently made a landmark ruling in the case of Hemavathi Ramesh vs the Income Tax Officer (ITO), reinforcing that cash deposits derived from earlier deposits are not entirely exempt from taxation. The judgement pertained to the Assessment Year 2017-18, in the aftermath of the demonetization period in India.
In this case, the ITAT Bangalore examined a situation where an individual’s cash deposits, primarily from house property and other sources, were scrutinized under the Income Tax Act, 1961. The issue in contention was whether the CIT(A) was justified in confirming the addition of Rs.8,66,000 under section 69A of the Act.
The court’s decision pivoted around two main aspects. Firstly, the acceptance of the sum of Rs.5,50,000 as a lease deposit prior to the demonetization period, which was contended by the assessee to serve as a legitimate source of the disputed cash deposits. Secondly, the recognition of sundry receipts and gifts amounting to Rs.2,50,000, already taxed and claimed by the assessee as another valid source.
Citing precedents set by the Hon’ble High Court of Karnataka, the tribunal held that cash deposits made from previous withdrawals cannot be entirely disregarded. As such, the tribunal permitted a deduction of Rs.6,50,000 from the original contested amount, and the remaining balance of Rs.2,16,000 was deemed taxable under section 69A of the Act.
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