Sushila Nana Savekar Vs ITO (ITAT Mumbai)
Mumbai ITAT Deletes Section 69A Addition on Cash Redeposits; Revenue Cannot Reject Explained Bank Withdrawals on Mere Suspicion
The Mumbai ITAT deleted the addition of ₹17.63 lakh made under section 69A, holding that cash redeposited into the assessee’s bank accounts could not be treated as unexplained when the source of the cash was established through earlier withdrawals from disclosed bank accounts. The assessee, a 74-year-old retired municipal employee, demonstrated that she had withdrawn ₹42.16 lakh from nine bank accounts during the year, out of which ₹24 lakh was earmarked for her daughter’s marriage and the balance was redeposited. The Tribunal observed that ₹4.47 lakh represented same-day withdrawal and redeposit (contra entries), while the remaining deposits were also covered by explained cash withdrawals. It held that although the assessee could not fully substantiate the proposed utilization of ₹24 lakh towards marriage expenses, that by itself did not negate the explained source of the withdrawn cash. Since the Revenue failed to establish that the withdrawn cash had been utilized elsewhere or that the deposits represented income from an undisclosed source, the addition was based merely on surmise regarding the retention of cash. Relying on the Karnataka High Court’s decision in S.R. Venkataraman and the Bengaluru Tribunal’s ruling in Sampathraj Rakesh Kumar, the Tribunal held that the Department cannot dictate how long an assessee may retain withdrawn cash. Accordingly, it directed deletion of the addition under section 69A.
