Case Law Details
Krishna Goyal Vs ACIT (ITAT Delhi)
In course of assessment proceedings, the assessee has explained the source of deposits in the bank account to be out of the withdrawals made from the very same bank account. However, the Assessing Officer as well as learned Commissioner (Appeals) have partly accepted the explanation of the assessee only to the extent of Rs.5,00,000 withdrawal from the bank account on 07.11.2016, just prior to declaration of demonetization. As far as the balance amount of Rs.18,00,000 is concerned, assessee’s claim has been disbelieved. From the details available on record, it is observed that before the departmental authorities, the assessee had stated that she had withdrawn Rs.26,00,000 from her bank account in financial years 2015-16 and 2016-17. From the details on record, it is observed that an amount of Rs.21,00,000 was withdrawn on three consecutive dates in financial year 2015-16 i.e. on 22nd, 23rd and 24th June, 2015. A further amount of Rs.5,00,000 was withdrawn on 07.11.2016. Apparently, the departmental authorities have not accepted assessee’s claim of availability of cash amounting to Rs.21,00,000 withdrawn in financial year 2015-16, since, such withdrawals were in close proximity to the date of demonetization. However, it is observed, from the stage of assessment proceedings itself, the assessee had explained that she is a terminally ill and for meeting any medical emergency, sufficient cash is kept at her hands. There is no adverse factual finding of the departmental authorities regarding the medical condition of the assessee. Thus, considering the fact that the assessee is facing serious medical condition, her explanation that cash withdrawals made earlier were kept at hand for meeting any medical emergency, to some extent, is believable. Therefore, the benefit of doubt can be given to the assessee. In view of the aforesaid, ITAT delete the addition of Rs.18,00,000.
FULL TEXT OF THE ORDER OF ITAT DELHI
This is an appeal by the assessee against order dated 30.06.2022 of learned Commissioner of Income-Tax (Appeals)-26, New Delhi pertaining to assessment year 2017-18.
2. The dispute in the present appeal is confined to addition of Rs.18,00,000 under Section 69A of the Income-Tax Act,1961.
3. Briefly the facts are, the assessee is a resident individual. For the assessment year under dispute, assessee filed his return of income on 07.03.2018 declaring income of Rs.26,350.
4. During the course of scrutiny assessment proceedings, the Assessing Officer called for various details including bank statement of the assessee. On perusing bank statement of assessee, he noticed that in the year under consideration, assessee had deposited cash amounting to Rs.23,00,000. He further noticed that such cash deposits were made during the demonetization period. He, therefore, called upon the assessee to explain the source of the cash deposits. In reply, assessee submitted that the cash deposits were made out of earlier withdrawals made during the financial years 2015-16 and 2016-17.
5. After verifying the details furnished by the assessee, the Assessing Officer noticed that on 07.11.2016, just prior to the demonetization, the assessee had withdrawn an amount of Rs.5,00,000. Thus, to that extent, he accepted assessee’s claim of deposits being made out of earlier withdrawals. The balance deposits of Rs.18,00,000 was treated by him as unexplained money under Section 69A of the Act and added back to the income of the assessee to be taxed under Section 155BE of the Act. Though, the assessee contested the aforesaid addition before learned Commissioner (Appeals), however,, she was unsuccessful.
6. Learned counsel appearing for the assessee submitted that the assessee is a senior citizen of more than 70 years and is suffering from cancer. He submitted, due to her medical condition and regular medical treatment, she used to withdrawn cash from the bank account regularly and keeps cash at hand for meeting any medical emergency. He submitted, at the time of demonetization, the assessee had cash available of Rs.23,00,000 from earlier withdrawals, which were deposited in the bank account. Thus, he submitted, assessee having properly explained the source of cash deposits, the addition made under Section 69A of the Act should be deleted. In support of his submission, learned counsel relied upon the following decisions:
i) Neeta Breja Vs. ITO – ITA No.524/Del/2017 A.Y.2010-11 dated 25.11.2011;
ii) CIT, (Central)-II vs. Kulwant Rai – 163 Taxman 585 (Del.) dated 13.02.2007; &
iii) Harjeet Kaur Vs. ITO – ITA No.2013/Del/2021 dated 25.10.2022.
7. Learned Departmental Representative strongly relied upon the observations of the Assessing Officer.
8. I have considered rival submissions and perused the material available on record.
9. In so far as the factual aspects of the issue is concerned, there is no dispute that post-demonetization, the assessee had deposited cash amounting to Rs.23,00,000 in her bank account.
10. In course of assessment proceedings, the assessee has explained the source of deposits in the bank account to be out of the withdrawals made from the very same bank account. However, the Assessing Officer as well as learned Commissioner (Appeals) have partly accepted the explanation of the assessee only to the extent of Rs.5,00,000 withdrawal from the bank account on 07.11.2016, just prior to declaration of demonetization. As far as the balance amount of Rs.18,00,000 is concerned, assessee’s claim has been disbelieved. From the details available on record, it is observed that before the departmental authorities, the assessee had stated that she had withdrawn Rs.26,00,000 from her bank account in financial years 2015-16 and 2016-17. From the details on record, it is observed that an amount of Rs.21,00,000 was withdrawn on three consecutive dates in financial year 2015-16 i.e. on 22nd, 23rd and 24th June, 2015. A further amount of Rs.5,00,000 was withdrawn on 07.11.2016. Apparently, the departmental authorities have not accepted assessee’s claim of availability of cash amounting to Rs.21,00,000 withdrawn in financial year 2015-16, since, such withdrawals were in close proximity to the date of demonetization. However, it is observed, from the stage of assessment proceedings itself, the assessee had explained that she is a terminally ill and for meeting any medical emergency, sufficient cash is kept at her hands. There is no adverse factual finding of the departmental authorities regarding the medical condition of the assessee. Thus, considering the fact that the assessee is facing serious medical condition, her explanation that cash withdrawals made earlier were kept at hand for meeting any medical emergency, to some extent, is believable. Therefore, the benefit of doubt can be given to the assessee.
11. In view of the aforesaid, I delete the addition of Rs.18,00,000.
12. In the result, the appeal is allowed, as indicated above.
Order pronounced in the open court on 28th December, 2022.
