2023 (5) TMI 628 - AT - Income Tax

Unexplained cash deposit during demonetization period - As submitted that the assessee is a housewife and her husband practice as a Registered Clerk with the Hon ble Calcutta High Court and is a Cancer Patient and undergoing medical treatment since 2005 and assessee being housewife kept small savings for the purpose of medical treatment of her ailing husband and when the scheme of demonetization was announced, she deposited her past savings in the bank, which were on account of three-dhan and this should not be treated as unexplained investment. HELD THAT - We notice that so far as the cash deposit of Rs.6,10,000/- made during the period 14.12.2016 to 16.12.2016, there is a cash withdrawn of Rs.9,00,000/- on 13.12.2016 and for the lack of specific finding by the ld. AO as to whether the deposits between 14.12.2016 to 16.12.2016 were in old currency or new currency, we give the benefit of doubt to the assessee and hold that the source of cash deposit of Rs.6,10,000/- between 14.12.2016 to 16.12.2016 was the cash withdrawal made on 13.12.2016 and thus the addition for unexplained cash deposit u/s 69 is uncalled for on the said sum of Rs.6,10,000/-. So far as the remaining amount of Rs.9,31,000/-, considering the fact that the assessee is a housewife and she had kept certain savings for the purpose of treatment of her ailing husband undergoing Cancer Patient. We accept that assessee was having stridhan to the tune of Rs.2,00,000/- as on 01.04.2016 and further allow the benefit of the minimum non-taxable limit for A.Y. 2017-18 at Rs.2,50,000/- and give further relief of Rs.4,50,000/- as explained cash and accordingly sustain the addition at Rs.4,81,000/- u/s 69 of the Act and partly allow the appeal of the assessee.

Summary

Issues involved:
The judgment concerns an appeal by the assessee against the addition of Rs.15,41,000 for unexplained cash deposit in a bank account during the demonetization period for the assessment year 2017-18.

Details of the judgment:

1. Issue of unexplained cash deposit:
The primary issue in the case was the addition of Rs.15,41,000 for an unexplained cash deposit in the bank account during the demonetization period. The Assessing Officer treated the cash deposit as unexplained investment under section 69 of the Act. The assessee, a housewife, failed to file a return of income for the relevant assessment year. The CIT(Appeals) confirmed the addition, leading to the appeal before the Tribunal.

2. Arguments and submissions:
The assessee's representative argued that the cash deposit was from past savings kept for the medical treatment of her cancer patient husband. The representative cited previous decisions and documents supporting the source of the funds. The Departmental Representative contended that the withdrawals made after the deposits were suspicious and lacked explanation.

3. Tribunal's findings:
The Tribunal examined the bank statements and noted the pattern of deposits and withdrawals during the demonetization period. It observed that certain withdrawals were made immediately after significant deposits, raising suspicions. The Tribunal found the arguments based on previous decisions cited by the assessee's representative to be inapplicable to the current case due to differing facts.

4. Decision and conclusion:
The Tribunal gave the benefit of the doubt to the assessee regarding a specific cash deposit and accepted the explanation for a portion of the amount deposited. It considered the assessee's status as a housewife and her savings for her husband's medical treatment. Ultimately, the Tribunal partly allowed the appeal, reducing the unexplained cash deposit amount to Rs.4,81,000.

5. Conclusion of the judgment:
In conclusion, the Tribunal partly allowed the appeal of the assessee, considering the circumstances and explanations provided regarding the unexplained cash deposit during the demonetization period.