Shri Harish Panwar Vs Income Tax Officer (Income Tax Appellate Tribunal, Jodhpur Bench)
Jodhpur ITAT Deletes ₹68.85-Lakh Demonetisation Addition: Cash Withdrawals From Partnership Firm Adequately Explained Deposits; Enhanced Section 115BBE Rate Inapplicable to AY 2017-18
Summary: The Jodhpur Bench of the Income Tax Appellate Tribunal allowed the assessee’s appeal for AY 2017-18 and deleted an addition of ₹68.85 lakh relating to Specified Bank Notes deposited in his Kotak Mahindra Bank account during the demonetisation period. The assessee had returned income of ₹13.26 lakh, including remuneration and interest from partnership firms M/s Shri Ram Excellency and M/s Parihari Textiles and income from other sources. The Assessing Officer treated the ₹68.85 lakh cash deposit as unexplained money under Section 69A, while the CIT(A) sustained the addition. The lower authorities were not satisfied with the assessee’s explanation of availability of substantial cash in hand and considered, inter alia, that the claimed cash balance was disproportionately high compared with the returned income and that the surrender made during an earlier survey was not on account of excess cash found.
Before the Tribunal, the assessee explained the complete movement of cash through cash statements for FYs 2014-15, 2015-16 and 2016-17. The assessee submitted that during a departmental survey conducted on 02.12.2014 he had surrendered approximately ₹2 crore relating to cash loans/advances and that the amounts subsequently recovered were reflected in his cash records. The cash statement for FY 2014-15 showed that the surrendered amount recovered in cash was deposited into the bank account and, together with the opening cash balance, resulted in a closing cash balance of about ₹8 lakh. In the succeeding year, the assessee withdrew approximately ₹45 lakh from his partnership firm M/s Shri Ram Excellency and, after a ₹10 lakh redeposit and monthly personal drawings, was stated to have a closing cash balance of ₹41.04 lakh.
