Case Law Details
Baldev Singh Vs ITO (ITAT Chandigarh)
Same-Day Withdrawal & Redeployment Explained: Chandigarh ITAT Deletes ₹1.25 Cr 69A Addition on Bank Deposits
Chandigarh ITAT, Division Bench ‘A’, in Shri Baldev Singh Vs ITO (ITA No.498/CHD/2025; AY 2016-17; order dated 18-12-2025), allowed the assessee’s appeal and deleted the addition of ₹1.25 crore made u/s 69A towards alleged unexplained cash deposits.
The Tribunal noted that the assessee had withdrawn ₹1.25 crore from his HDFC Bank account on 20-07-2015 and redeposited the same amount into his Axis Bank account on 21-07-2015, which was thereafter utilised for issuing a cheque towards purchase of property. These facts were verified from bank statements and even confirmed by the Department on verification from assessment records.
While the CIT(A) had already accepted the explanation and directed deletion of ₹1.25 crore, the ITAT went a step further and held that once the source, availability and movement of funds are clearly traceable through banking channels, no addition u/s 69A can survive. The Tribunal emphasised that mere redeposit of withdrawn funds cannot be treated as unexplained money when the transaction is fully verifiable.
Accordingly, the ITAT deleted the entire addition of ₹1.25 crore, allowed the appeal in full, and reaffirmed that bank-to-bank fund trails with same-day proximity conclusively rebut allegations of unexplained cash.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
This is an appeal filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals) NFAC Delhi (hereinafter referred to as the ” CIT(A)”) dated 11.03.2025 for the assessment year 2016-17.
2. In this case, the solitary issue raised by the Assessing Officer was that the assessee has deposited the amount of Rs.1,25,00,000/- in his bank account, which, in the opinion of the AO, the assessee was not able to explain the source of such deposit.
3. Feeling aggrieved, the assessee filed the appeal before ld.CIT (Appeals) and before ld.CIT (Appeals), the issue has not been adjudicated properly by the lower authorities. The relevant findings of the ld.CIT (Appeals) are reproduced hereunder :
“5.4. Grounds No.3 & 4: In these grounds No.3 & 4, the appellant has challenged the addition of u/s. 69A of an amount of Rs.1,96,70,500/- as unexplained money u/s. 69A being the cash deposited by the appellant in his Axis Bank account during the AY 2016-17. In this case, the assessing officer had made an addition u/s. 69A of an amount of Rs.1,96,70,500/- as unexplained money u/s. 69A being the cash deposited by the appellant in his Axis Bank account during the AY 2016-17. In this regard, the appellant had submitted additional evidences viz., sale deed document, affidavit from mother-in-law, bank account statements pertaining to HDFC bank, Axis Bank and written submissions in support of the grounds of appeal. Further, the appellant had furnished a written submission on 01.10.2024 wherein the appellant had claimed that his mother-in-law had 4 sold her agricultural land on 26.05.2015 for a sale consideration of Rs.1,40,00,000l-, the sale consideration having been received by account payee cheque from the purchaser, and that this cheque was presented into the joint account of his mother-in-law maintained with HDFC Bank. The appellant’s mother-in-law had also given an affidavit that has been certified on 17.10.2022 claiming that she had gifted this amount of Rs. 1,40,00,000/-to her daughter Smt. Manjit Kaur, and that the gifted amount can be used by her daughter and son-in-law as they wish. In this context, the appellant had further stated that he had accordingly withdrawn Rs.1,25,00,000/- from the HDFC bank account on 21.07.2015 and had deposited the same into his Axis Bank account on 21.07.2015. In support of the above contention, the appellant had submitted the relevant bank account statements. Since the documents submitted as additional evidence by the appellant are very much relevant to explain the appellant’s position/argument in this case, the same are hereby admitted under Rule 46A(1)(d) for reasons that the assessing officer had not afforded adequate opportunity to the appellant and had passed the assessment order ex-parte u/s. 144 of the Act and especially taking into consideration the genuine medical exigencies faced by the appellant as evidenced form the medical documents submitted during the appellate proceedings. I have perused the arguments in the written submission of the appellant, the relevant bank account statements, the affidavit of the mother-in-law pertaining to gift by mother-in-law to her daughter, and on perusal find merit in the appellant’s contention that the source for deposit of cash of Rs.1,25,00,000/- in the bank account of the appellant stands explained and the same cannot be added u/s.69A. Accordingly, I hereby direct the assessing officer to delete the addition of Rs.1,25,00,000/- made u/s. 69A in the appellant’s case for the AY 2016-17. At the same time, the source for the cash deposit of Rs.71,70,500/-made on 05.08.2015 still stands unexplained, and the same accordingly deserves to be confirmed u/s. 69A. I, therefore, confirm the addition of an amount of Rs.71,70,500/- as unexplained money u/s. 69A and simultaneously direct the assessing officer to delete the addition of Rs.1,25,00,000/-made u/s. 69A in the appellant’s case for the AY 2016-17 since the same stands explained with concrete corroborative evidence. Accordingly, grounds No. 3 & 4 are partly allowed.”
4. Before us, it was submitted by the ld. AR having reference to the Paper Book filed before us and the bank statement that the amount of Rs.1,25,00,000/- was withdrawn by the assessee from its bank account and thereafter the said amount was redeposited in the bank on the very same day by the assessee. Infact, thereafter, assessee had issued the cheque for buying the property to the seller. It was submitted by the assessee that the amount of Rs.1,25,00,000/- was withdrawn from the HDFC Bank on 20.07.2015 and thereafter the said amount was deposited by the assessee in the bank account on 21.07.2015 at Axis Bank. Thereafter, the cheque was issued by the assessee for purchasing the property.
4.1 On the last date of hearing, ld. DR was requested to verify the abovenoted facts. Today, i.e. on 17.12.2025 the ld. AR, on verification of record and after seeking record from the AO had submitted that the submission of the ld. AR that the amount has been withdrawn on 20.07.2015 and thereafter deposited on 21.07.2015 is found to be entirely correct. In view of the above, the ld. AR submitted that since the factum of deposit of Rs.1,25,00,000/- has duly been explained with reference to the source and availability of the amount in the bank account, no addition should be made in the hands of the assessee.
5. We have heard the rival contentions and gone through the record. In the present case, the assessee was able to demonstrate the source of withdrawal of the amount of Rs.1,25,00,000/- and re-deposit of the same amount on very same date in his bank account, therefore, in our considered opinion, no addition can be made on account of the explanation given by the assessee and given by the ld. Sr.DR. We are of the considered opinion that this amount is verifiable from the bank statement filed by the assessee before us and therefore, this addition of the assessee is required to be deleted and accordingly, we delete the same.
6. No other ground has been raised by any of the parties.
7. In the result, appeal of the assessee is allowed.
Order pronounced on 18.12.2025.
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