Ameeta Paramanand Nadkarni Vs ITO (ITAT Mumbai)
VSV Form-3 Without Payment Doesn’t Bar Appeal: ITAT Mumbai Deletes ₹7.65 Lakh Demonetisation Addition
Mumbai ITAT allowed the Assessee’s appeal and deleted the addition of ₹7,64,940 made u/s 69A r.w.s. 115BBE relating to demonetisation-period cash deposits.
The AO had accepted part of the cash deposits of ₹17.56 lakh and treated the balance ₹7.64 lakh as unexplained. The CIT(A) dismissed the appeal solely on the ground that the Assessee had opted for the Vivad-se-Vishwas Scheme, 2020 and Form-3 had been issued.
The Tribunal held that mere issuance of Form-3 does not conclude settlement unless the Assessee pays the determined amount. Since no payment was made, the Assessee had not availed the scheme and was entitled to be heard on merits.
On merits, the ITAT found the explanation plausible: the Assessee was a regular taxpayer; cash deposits were sourced from earlier cash withdrawals from her own account and her mother’s account, past savings/streedhan, and cash kept for medical emergencies. The AO’s arbitrary restriction of withdrawals, reduction of streedhan, and rejection of mother’s withdrawals were held to be unjustified. Relying on Jaya Aggarwal vs. ITO (Delhi HC), the Tribunal emphasised that human conduct and practical realities must be considered while evaluating explanations.
Accordingly, the ITAT deleted the entire addition and allowed the appeal in full.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
