9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2025 (4) TMI 722 - AT - Income TaxAddition u/s 69A r.w.s. 115BBE - cash deposit in the bank account during the demonetization period - assessee made huge cash deposits during the demonetization period and could not explain the source of the same - HELD THAT - It is common knowledge that people keep certain amount of cash in house for meeting unexpected emergencies. Therefore in our opinion neither the entire addition made by the Assessing Officer is justified nor the submissions of the assessee that he had sufficient cash available with him can be accepted outright. Considering the fact that the assessee was declaring reasonable income in the last three years and the bank account also reflects certain withdrawals in the preceding months and as mentioned earlier people do keep certain amount of money for meeting emergencies etc. therefore considering the totality of the facts of the case and in the interest of justice we are of the considered opinion that an amount of Rs. 15 lakhs can reasonably be estimated as available to the assessee as on 21.11.2016 for making the cash deposit during the demonetization period. We therefore modify the order of the CIT(A) / NFAC and restrict the addition to Rs. 6, 40, 780/- by deleting Rs. 15, 00, 000/-. The grounds raised by the assessee on this issue are partly allowed. Applicability of the provisions of section 115BBE - We find in the case of Nilesh Popatlal Gada 2024 (12) TMI 1556 - ITAT PUNE has held that the provisions of section 115BBE of the Act are applicable to assessment year 2017-18.
ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS 1. Addition under Section 69A of the Income Tax Act Relevant legal framework and precedents: Section 69A of the Income Tax Act provides for the treatment of unexplained money as deemed income if the assessee fails to satisfactorily explain its source. Court's interpretation and reasoning: The Tribunal considered the assessee's claim of having sufficient cash on hand at the time of deposit. The assessee argued that the cash deposited during the demonetization period was from previous cash withdrawals and rental income, which were reflected in the Cash Book. Key evidence and findings: The assessee presented a Cash Book showing an opening balance of Rs. 15,22,137/- on 01.04.2014. However, the Tribunal noted that the assessee had not maintained a Cash Book earlier nor provided cash in hand details in prior tax returns. Application of law to facts: The Tribunal found that while the assessee had declared reasonable income in previous years, the claim of having sufficient cash available was not fully credible. The Tribunal acknowledged that individuals might keep cash for emergencies, and therefore, a partial acceptance of the assessee's claim was justified. Treatment of competing arguments: The Tribunal balanced the assessee's explanation with the lack of documentary evidence supporting the full amount of cash claimed. It concluded that a reasonable estimate of Rs. 15 lakhs could be considered as available cash. Conclusions: The Tribunal modified the addition under Section 69A, reducing it to Rs. 6,40,780/- by accepting Rs. 15 lakhs as explained cash. 2. Applicability of Section 115BBE Relevant legal framework and precedents: Section 115BBE deals with the tax treatment of income referred to in Sections 68, 69, 69A, 69B, 69C, and 69D. Court's interpretation and reasoning: The Tribunal referred to a decision by a Co-ordinate Bench, which held that Section 115BBE applies to the assessment year 2017-18. Key evidence and findings: The Tribunal found no contrary decisions presented by the assessee against the applicability of Section 115BBE for the relevant assessment year. Application of law to facts: The Tribunal upheld the applicability of Section 115BBE for the assessment year 2017-18, dismissing the assessee's argument against its retrospective application. Conclusions: The Tribunal confirmed the applicability of Section 115BBE to the assessment year in question, dismissing the related grounds raised by the assessee. SIGNIFICANT HOLDINGS Preserve verbatim quotes of crucial legal reasoning: "Considering the totality of the facts of the case and in the interest of justice, we are of the considered opinion that an amount of Rs. 15 lakhs can reasonably be estimated as available to the assessee as on 21.11.2016 for making the cash deposit during the demonetization period." Core principles established: The Tribunal emphasized the need for a balanced approach in assessing unexplained cash deposits, considering reasonable estimates of cash availability based on the assessee's financial history and typical cash retention practices. Final determinations on each issue: The Tribunal partly allowed the appeal by reducing the unexplained cash addition under Section 69A to Rs. 6,40,780/-. It upheld the applicability of Section 115BBE for the assessment year 2017-18.
|
