The Income Tax Appellate Tribunal ( ITAT ), Bangalore bench while upheld the addition made under Section 69 A of the Income Tax Act, 1961 held that no prudent man would retain a sum for a long period to redeposit in an account.
The assessee, Shaon Paul is non resident Indian. For the Assessment Year 2017-18, return of income was filed under the head ‘Income from Other Sources.Thereafter assessee case was selected for scrutiny for the reason of cash deposits made during the demonetization period.
Subsequently The AO obtained a copy of the bank statement of assessee. It was noticed that assessee had deposited a sum of Rs.5 lakhs on 16.11.2016 in his SB A/c maintained with Canara Bank.
The assessee explained the source of cash deposit by stating that he had sold a property vide sale deed dated 20.08.2011 and he was in receipt of Rs.2 lakhs which was entrusted with the assessee’s parents for emergency since he had lived outside the country. It was also submitted that assessee had withdrawn cash of Rs. 2 lakhs each on 01.07.2011 and 19.09.2011 and same also has been utilized for the cash deposits made.
After examining the submission the AO rejected the contentions of assessee and held that the cash withdrawals and receipt of Rs.2 lakhs on sale of property was prior to six years to the deposit and in all likelihood the cash entrusted with the parents would have been expended for personal need.
Aggrieved, the assessee filed further appeal before the CIT(A) rejected the contention of the assessee and confirmed the addition made by the AO under section 69A of the Act, amounting to Rs.5 lakhs. Therefore the assessee has filed the second appeal before the Tribunal.
During the proceedings Raghavendra Chakravarthy,Counsel for assesee argued that assessee is an Australian citizen and certificate to the effect has been furnished in the Paper Book submitted. It is stated that the assessee does not have any other source of income in India and the cash deposits are out of known source of income, hence addition under section 69A of the Act is not justified.
Ganesh R Ghale, Counsel for Revenue, argued that more than six years have lapsed from the date of the aforesaid withdrawals and redeposit. Hence the cash of Rs.5 lakhs could not have been retained as such for a long period of almost 6 years.
The tribunal observed that the explanation of the assessee with regard to the source of cash deposit is too far-fetched as no prudent man would retain a sum of Rs.5 lakhs which he had received / withdrawn in 2011 for redeposit in the year 2016. In other words, the time period is fairly lengthy for redeposit to be ascribed to previous withdrawals.
After reviewing the facts and records, the single -member bench Of George George K, ( Vice President ) upheld the addition made under Section 69 A of the Income Tax Act held that no prudent man would retain a sum for a long period to redeposit in an account.
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