Case Law Details
Mahendra Kumar Parakh Vs ITO (ITAT Kolkata)
The sole issue in the present appeal is in respect of cash deposit made during the demonetization period and it is an undisputed fact that the assessee has deposited a sum of Rs. 2,50,000/- only in cash in his bank account during such period and the ld. AO treated the entire amount as unexplained in the hands of assessee. The matter of the assessee when it was carried before the ld. CIT(A), the ld. CIT(A) granted partial relief to the assessee to the tune of Rs. 25,763/- and upheld the addition to the extent of Rs. 2,50,000/-. By stating that cash deposit made during the demonetization period was Rs. 2,50,000/- and the ld. AO has wrongly taken the figure of Rs. 2,75,763/- while framing the assessment order. Before us, the assessee has submitted that cash deposit by assessee during the period of demonetization to be out of past accumulated savings and the assessee is a regular tax payer filed its return of income in due course. Considering the aforesaid submission and perusing the material available on record and in view of the CBDT Circular (supra) relying on the decision of co-ordinate bench of Agra in the case of Smt. Uma Agrawal (supra), we are of the considered view that the explanation of the assessee about the source of cash deposit cannot be brushed aside without there being any evidence to the contrary. We, therefore, direct the AO to delete the addition of Rs. 2,50,000/- as upheld by the ld. CIT(A), thus the grounds of appeal taken by the assessee is allowed.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
This appeal in ITA No. 697/Kol/2022 for A.Y. 2017-18 is preferred by the assessee against the order of the Commissioner of Income Tax, National Faceless Appeal Centre, Delhi (NFAC) [Ld. CIT in short], dated 24.09.2022. The assessee has raised the following grounds of appeal:
“1. That on the facts and circumstances of the case, the Ld. CIT (Appeals) was not justified on facts and in law in not accepting appellants explanation about cash deposit of Rs. 2,50,000/- in bank during demonetization period and treating the cash deposit as unexplained money u/s 69A. The addition may kindly be deleted and suitable relief be allowed.
2. That on the facts and circumstances of the case, the Ld. CIT (Appeals) was not justified on facts and in law in not considering the circular issued by the CBDT for cash deposit during the demonetization period. The cash deposit of Rs. 2,50,000/- by the appellant is within the limit prescribed by the CBDT.
3. Without prejudice to the aforesaid ground, the assessee was not granted appropriate opportunity of being heard during the appeal and the case may be remanded back to the CIT(Appeals) for reply.”
2. At the outset, we find that there is a delay of 12 days in filing of the appeal by the assessee. We after perusing the petition for condonation are convinced that the assessee was prevented by sufficient cause from filing the appeal in time and hence delay is condoned and appeal is admitted.
3. The assessee is an individual, who filed his return of income for the A.Y. 2017-18 on 31.03.2018 declaring total income of Rs. 8,36,410/-. The case of the assessee was selected for scrutiny for the reasons that there was cash deposit during the period of demonetization. The ld. AO noticed that the assessee has made cash deposit of Rs. 2,75,763/- during the demonetization period and the assessee was asked to give the details source of such cash deposit and in response to the same assessee has submitted that savings were out of accumulated of fund of cash, which were savings from over 30 years in the family. The submission of the assessee was not acceptable to the ld. AO and after considering the submission of assessee, the cash deposit made of Rs. 2,75,763/- treated as unexplained cash u/s 69A of the Act.
4. Aggrieved by the above order, assessee carried the matter before the ld. CIT(A) and the ld. CIT(A) vide his order dated 19.03.2022 granted partial relief to the assessee to the extent of Rs. 25,763/- by stating that actual cash deposit made by the assessee during the period of demonetization was only Rs. 2,50,000/- and the ld. AO has wrongly taken the figure as Rs. 2,75,763/- and he upheld the addition to the extent of Rs. 2,50,000/-
5. At the time of hearing before us, the ld. AR submitted that the assessee has raised various grounds of appeal, but the solitary issue in respect to the addition of Rs. 2,50,000/- on account of cash deposit made by the assessee in his bank account during the demonetization period. The ld. AR reiterated the submission made before the lower authority and further submitted that the source of cash deposit was out of accumulated savings made by the assessee over the past period out of savings. He further submitted that CBDT vide Instruction No. 3/2017 dated 21.02.2017 has stated that no verification of cash deposit upto Rs. 2,50,000/- would be made as the source of such amount either household savings/savings from past income. The ld. counsel also relied on the decision of Agra Bench of Tribunal in the case of Smt. Uma Agrawal vs ITO in ITA No. 35/Agra/2021 dated 18.06.2021 and submitted that in view of the aforesaid decision rendered by the Tribunal and the instant issue is covered in favour of the assessee. On the other hand, ld. DR supported the order of the lower authorities.
6. We have heard the rival submission of the parties and perused the material available on record. The sole issue in the present appeal is in respect of cash deposit made during the demonetization period and it is an undisputed fact that the assessee has deposited a sum of Rs. 2,50,000/- only in cash in his bank account during such period and the ld. AO treated the entire amount as unexplained in the hands of assessee. The matter of the assessee when it was carried before the ld. CIT(A), the ld. CIT(A) granted partial relief to the assessee to the tune of Rs. 25,763/- and upheld the addition to the extent of Rs. 2,50,000/-. By stating that cash deposit made during the demonetization period was Rs. 2,50,000/- and the ld. AO has wrongly taken the figure of Rs. 2,75,763/- while framing the assessment order. Before us, the assessee has submitted that cash deposit by assessee during the period of demonetization to be out of past accumulated savings and the assessee is a regular tax payer filed its return of income in due course. Considering the aforesaid submission and perusing the material available on record and in view of the CBDT Circular (supra) relying on the decision of co-ordinate bench of Agra in the case of Smt. Uma Agrawal (supra), we are of the considered view that the explanation of the assessee about the source of cash deposit cannot be brushed aside without there being any evidence to the contrary. We, therefore, direct the AO to delete the addition of Rs. 2,50,000/- as upheld by the ld. CIT(A), thus the grounds of appeal taken by the assessee is allowed.
7. In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 16.05.2023.
