In a significant ruling, the Income Tax Appellate Tribunal (ITAT), Bangalore bench has deleted an addition of around 7 lakhs on account of cash deposit during demonetization against the assessee, a retired officer by holding that the amount was kept to meet medical emergencies and therefore, the same cannot be suspected under section 69A of the Income Tax Act, 1961.
The assessee is a retired army officer and is drawing pension. During demonetisation period the assessee deposited a sum of Rs.7,01,000/- in aggregate in two bank accounts. The assessee explained that the amount was kept to meet medical exigencies. However, the Assessing Officer observed that being an army officer, the assessee is provided with free treatment facilities and hence, the claim of keeping cash at home is not acceptable.
Shri B.R. Baskaran, Accountant Member observed that a perusal of the documents would show that the assessee has withdrawn a sum of Rs.8,00,000/- from his bank account maintained with ICICI Bank on 05.06.2015.
Ruling in favour of the assessee, the Tribunal held that “I notice that the assessee has withdrawn cash in small amounts in subsequent period also. Since the assessee is an aged person and retired from army, it is quite possible that the assessee had kept the money in cash with him in order to meet medical emergencies. The assessee is a pensioner and there is no other material to show that the cash of Rs.8,00,000/- withdrawn earlier had been spent away. Accordingly, in the facts and circumstances of the case, I am of the view that the explanation of the assessee that he has made the deposit of Rs.7,01,000/- out of the cash withdrawal made earlier is quite plausible. Accordingly in my view the sources for making deposits stand explained in this case.”
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