Surya Prakash Rao Volam Vs ITO (ITAT Hyderabad)
Cash Withdrawn for Son’s Wedding Cannot Become Unexplained Money Merely Because It Returned in Instalments: Hyderabad ITAT Deletes Addition u/s 69A & Rejects 60% Tax Rate u/s 115BBE for AY 2017-18
The dispute
The Hyderabad Bench of the ITAT examined whether cash deposited during the demonetisation period could be treated as unexplained money u/s 69A despite corresponding withdrawals from disclosed bank accounts. The Tribunal held that once prior withdrawals were established, the Revenue could not disregard their availability merely on suspicion that the money might have been spent or because the deposits were made in several instalments.
The assessee, Shri Surya Prakash Rao Volam, had filed his return for AY 2017-18 declaring a total income of ₹12,64,000. His case was selected for limited scrutiny under CASS. The AO made certain disallowances relating to housing-loan interest & deductions claimed u/ss 80D, 80E & 80DDB, thereby recomputing the declared income at ₹17,07,174.
More significantly, the AO made an addition of ₹19,54,500 u/s 69A towards cash deposited in the assessee’s bank accounts during the demonetisation period. The assessment was consequently completed u/s 143(3) at a total income of ₹36,61,674. The first appellate authority sustained the addition, bringing the assessee before the Tribunal.
