The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that addition under Section 69 of the Income Tax Act 1961 is not sustainable on mere delay in deposit during demonetisation period.
The Assessee Raj Kumar had filed an appeal against addition of Rs. 35 lakhs under Section 69A of the Income Tax Act on account of cash deposit made during the demonetization period.
In the submissions filed on 09.12.2019, the assessee submitted that the cash flow pertaining to FY 2011-12 to 2016-17 and cash balance as on 08.11.2016 was Rs. 43,22,366/-.
From the relevant of assessment order, the Assessing Officer had not given any findings on said submissions, which also supported factual contention of the assessee but the Assessing Officer had not given any finding thereon
Rajat Jain, on behalf of the assessee submitted that the assessee was having closing cash in hand of Rs. 43,22,366 therefore, the amount of Rs. 15 lakh deposited by the assessee was much lesser than the cash in hand.
He further submitted that the assessee was a farmer having no other source of taxable income except small bank interest and exempt agricultural income therefore he was not filing return of income being below the required limit of taxation.
Therefore, the Assessing Officer, without controverting the submission of the assessee in the said reply and bringing out any material on record to show that the assessee was having other undisclosed sources of income, was not entitled to make any addition under Section 69A of the Income Tax Act.
O M Prakash on behalf of the revenue submitted that no justification was provided by the assessee why it was not deposited from 09.1.2016 to 21.12.2016 and wealth tax return was also not reliable to show cash balance as on 01.04.2011.
A Single Bench of Chandra Mohan Garg, (Judicial Member) allowed the appeal filed by the assessee holding that the assessee is a farmer earning exempt agricultural income and small interest income and has no other means of income. Also, in the absence of evidences to destroy the factual submissions of assessee and also as assessee was allowed to deposit amount up to 31st December 2016, a delay in deposit could not be a valid basis for raising any doubt against the assessee.
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