Addition of Rs.6.48 Lakh as Unexplained SBN Deposits During Demonetization: ITAT Deletes Addition, Accepting Past Savings and Bank Withdrawals [Read Order]
The tribunal observed that the cash deposits were consistent with accumulated savings, withdrawals, and cash received on various family occasions, and that the AO had not provided any contrary evidence.
The Delhi Bench of Income Tax Appellate Tribunal ( ITAT) deleted the addition of Rs.6.48 lakh treated as unexplained Specified Bank Notes (SBN) deposits during demonetization, accepting that the amount represented the assessee’s past savings and prior bank withdrawals.
Anandi Committee,appellant-assessee, filed her income tax return on 28.03.2018, declaring a total income of Rs. 2,32,490/-. The case was selected for scrutiny because the cash deposited in SBN during the demonetization period was significantly higher than the declared income. Notices were issued and duly responded to by the assessee.
The Assessing Officer (AO) examined the submissions and treated Rs. 7,00,000/- of the total SBN deposits of Rs. 13,48,000/- as genuine, making an addition of Rs. 6,48,000/- under section 69A read with section 115BBE for the unexplained cash.
The assessee appealed before the Commissionerof Income Tax (Appeals)[CIT(A)], which was dismissed on 22.11.2024. Dissatisfied, the assessee filed an appeal before the tribunal.
The assessee counsel stated that the assessee, a retired government employee, had accumulated savings along with prior bank withdrawals, which were deposited during the demonetization period in SBN. He explained that cash received on various family occasions was accumulated over time, and regular bank withdrawals for contingencies also contributed to the deposits.
The counsel noted that the assessee was around 62 years old, unmarried, and had no liabilities, and that savings of approximately Rs. 7,00,000/- were reasonable. He requested that the additions made by the authorities be deleted.
The Departmental counsel however, supported the lower authorities’ findings and urged confirmation of the additions.
The two member bench comprising Yogesh Kumar U.S (Judicial Member) and Manish Agarwal (Accountant Member) considered the submissions and records. The assessee had consistently maintained that the cash deposited during demonetization was from bank withdrawals on various dates, along with past savings and cash received on different occasions.
The AO accepted withdrawals made between 1.4.2016 and 8.11.2016 but did not accept the cash claimed from past savings and earlier withdrawals. The tribunal observed that the assessee was around 62 years old and that cash of Rs. 6,48,000/- could not be considered excessive. An affidavit filed by the assessee supporting these facts was disregarded without any contrary evidence.
The appellate tribunal concluded that the explanation of accumulated past savings was reasonable and directed the AO to delete the addition.
Accordingly the appeal was allowed.
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