The Income Tax Appellate Tribunal (ITAT), Delhi Bench upheld the addition on the ground that the assessee failed to explain the source of cash deposit in her bank account during the demonetization period.
The assessee, Leela Devi filed the return of income declaring total income. The assessee is an individual having income from house property and income from other sources. The assessee has made a cash deposit of Rs. 15 lakhs with HDFC Bank during the demonetization period.
The assessee has submitted that cash deposited during the demonetization period includes lifetime savings and part of cash withdrawal from bank account in earlier years for personal security and other household expenditure.
The assessee further stated that her withdrawal during Financial Year 2014-15 was Rs. 14,50,000/-. The reply of the assessee was not found tenable, therefore, cash deposit of Rs. 15 lakhs in bank account is treated as income from undisclosed sources and added to the income of the assessee under section 69A of the Act read with section 115BBE of the Act.
The assessee challenged the addition before CIT(A). The submissions of the assessee are reproduced in the appellate order in which the assessee made similar submissions that cash was deposited in three installments of Rs. 5 lakhs.
It was submitted that there was a matrimonial dispute between the assessee’s son and her daughter-in-law after the marriage which was performed in June, 2012.
The matrimonial dispute was not settled till the demonetization so cash of Rs. 15 lakhs lying at the house was deposited in the bank account. The source of the cash deposit is explained as above. Ultimately, the matrimonial dispute was settled vide statement for a total sum of Rs. 23 lakhs out of which Rs. 7 lakh was paid to the daughter-in-law and balance amount of Rs. 16 lakhs was paid to daughter-in-law in two installments. The assessee, therefore, explained that cash deposit is from these sources.
The CIT(A), however, did not accept the explanation of the assessee and dismissed the appeal of the assessee.
The coram consisting of Bhavnesh Saini noted that when the matrimonial dispute was not settled till August, 2019, there was no reason for the assessee to keep the cash at home.
The ITAT further said that when assessee made cash deposits of Rs. 15 lakhs in three installments in her bank account in November, 2016, would lead to irresistible conclusion that assessee was keeping unaccounted cash money of Rs. 15 lakhs with her at the time of demonetization period and the assessee realizing that such currency cannot be used anywhere, she deposited same in her bank account and purposely the return of income was filed belatedly after expiry of the period provided under section 139(1) for filing of the return of income within the period of limitation.
Therefore, the tribunal while upholding the addition held that the assessee failed to explain the source of a cash deposit in her bank account during the demonetization period.
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