Comal Ramachandran Gayathri Vs DCIT (ITAT Chennai)
ITAT Chennai held that higher rate of tax @60% u/s. 115BBE of the Income Tax Act will not apply to transactions prior to cut-off date i.e. 01.04.2017. Accordingly, AO directed to calculate tax @30% on the amount sustained.
Facts- The case of the assessee was selected for limited scrutiny to examine the source of cash deposits made during the demonetization period. During demonetization period assessee had deposited a sum of Rs.30,00,000/- in her bank account on 16.11.2016.
AO completed the assessment u/s.143(3) of the Act vide order dated 12.09.2019. The AO in the assessment order added sum of Rs.26,00,000/- after accepting the source of cash deposit of Rs.4,00,000/-. The AO also applied the special rate of taxation u/s.115BBE of the Act.
CIT(A) partly allowed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Held that in our view there is merit in the contention of the revenue that other withdrawals from past 4 years are kept without spending/without depositing cannot be accepted without proper justification or substantiation. Having said so, we are also conscious of the fact that the assessee is a senior citizen living alone and requires cash for any medical emergency. Considering the facts peculiar to the assessee’s case, we are restricting the addition made by the AO to 50% of Rs.23,33,000/- on the ground that balance is saved from past withdrawals. The grounds raised by the assessee is partly-allowed in this regard.
