Ganapathy Panneerselvam Vs ITO (ITAT Chennai)
During the limited scrutiny to examine cash deposits made during the demonetization period, when questioned by AO about the source of the cash deposits of Rs.15,10,500/-, the Individual assessee, explained before AO that the cash deposits made during the demonetization period represented the re-deposit of unutilized cash previously withdrawn from the same bank account. In support of this explanation, the assessee submitted bank statements reflecting the cash withdrawals, along with bills & supporting documents for the expenses incurred for the stated purpose.
AO held that as a general rule of thumb cash is only withdrawn when there is none available for spending. So to suggest that the assessee kept on withdrawing cash while it accumulated in his hand, until he re-deposited the same is incredible. Deposit of Rs.15,10,500/- was made during the demonetization period, after a lapse of six months from the last withdrawals. No prudent person would hold such amount of cash for an extended period & forgo the interest that could have been earned, especially when he has no other source of income except interest income. Claim of assessee that such withdrawals was made during May 2015 to May 2016 for meeting expenses, in connection with son’s marriage is also farfetched. Hence AO treated cash deposit made in bank A/c during 08.11.2016 to 31.12.2016 as unexplained & added u/s 69.
