While deleting an addition under section 69A of the Income Tax Act, 1961, the Income Tax Appellate Tribunal (ITAT), Delhi bench has held that the re-deposit of cash after the declaration of the demonetization for the purpose of the renovation of house and marriage of son is normal conduct of a man ordinary prudent which cannot be doubted unless revenue authorities bring on record positive or adverse material to establish that the amount withdrawn by the assessee from his bank account was utilized or deposited somewhere else.
The assessee, Mr. Laxmi Narain has deposited amount of Rs. 10,49,000/- in cash in his bank account during demonetization period on 18.11.2016 and prior to this assessee has made several deposits for the renovation of his house and on account of wedding of his son and other miscellaneous expenses. The AO made an addition under section 69A of the Income Tax Act.
Shri Chandra Mohan Garg (Judicial Member) found that when the purpose of renovation of house and marriage of son is deferred and the assessee was having cash amount withdrawn from his bank then after declaration of demonetization he had no option but to re-deposit the same to his bank account.
“This conduct is a normal conduct of a man ordinary prudent which cannot be doubted unless revenue authorities bring on record positive or adverse material to establish that the amount withdrawn by the assessee from his bank account was utilised or deposited somewhere else and the impugned amount of cash deposited by the assessee during demonetization was not the same which was withdrawn by the assessee from his bank account during predemonetization period. No such findings have been recorded by the authorities below in this case. Therefore I am inclined to hold that the explanation offered by the assessee explaining the source of cash deposit to his bank account his properly explained and no addition u/s. 69A of the Act or any other provision of the Act is required to be made in the hands of assessee on this count. Accordingly grounds of assessee are allowed and AO is directed to delete the addition.”
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