Case Law Details
Madhavan Suram Vs DCIT (ITAT Hyderabad)
Introduction: The Income Tax Appellate Tribunal (ITAT) Hyderabad recently delivered an important verdict in the case of Madhavan Suram vs. DCIT (Deputy Commissioner of Income Tax). The case revolves around the quashing of an addition under Section 115BBE of the Income Tax Act, 1961, due to the inability of the elderly assessee to recall income details within the specified time frame.
Background of the Case: Madhavan Suram, the assessee in this case, is approximately 73 years old and retired as a Cashier from the State Bank of India (SBI) in 2001. In the assessment year 2017-18, the Income Tax Department initiated proceedings concerning cash deposits of Rs. 18,00,000 in a savings account held at the Nellore Co-operative Urban Bank Ltd.
The learned Assessing Officer recorded the assessee’s statement on two occasions: first on 27/06/2019 and then on 17/07/2019. The delay between these two statements was attributed to the advanced age of the assessee, who found it challenging to collect details about the cash deposits. During these statements, the assessee explained the sources of most of the deposits, except for a sum of Rs. 4,00,000. The Assessing Officer accepted the explanations for deposits totaling Rs. 14,00,000 but added Rs. 4,00,000 as “income from other sources” under Section 115BBE of the Income Tax Act due to the inability of the assessee to provide details or documentary evidence.
Subsequently, the assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)], who rejected the claim that the elderly assessee had difficulty recalling the source of the remaining Rs. 4,00,000 deposit. The CIT(A) also refused to accept the confirmation affidavit of the debtor because it was submitted at a later stage, deeming it an “afterthought.”
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