9911796707
TMI Blog2025 (2) TMI 938X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 254 of the Income Tax Act, 1961 (hereinafter referred to as the Act) before this Tribunal. The assessee is aggrieved by the order bearing number ITBA/APL/S/250/2024-25/1067499131(1) dt. 09/08/2024 of CIT(A) passed u/s 250 of the Act, which is hereinafter referred to as the "impugned order". The relevant assessment year is 2017-18 and the corresponding previous year period is from 01/04/2016 to 31/03/2017. 2. Factual Matrix 2.1 The assessee had filed here return of income on 22/07/2017 declaring taxable income of Rs. 1,59,720/-. 2.2 That subsequently the case of the assessee was selected for "Limited Scrutiny" through computerized aided system of selection (cass) to verify cash deposit during the demonetization period." 2.3 That a statutory notice u/s 143(2) of the Act was issued on 24/09/2018 by the then ITO, Ward-3, Rohtak. Later on the case was transferred to the Income Tax Officer, Ward-3, Ambala vide letter No. 5732 dt. 07/08/2019 and the ITO Ward-3, Ambala, transferred the case to ITO, Ward-5, Ambala. 2.4 That thereafter, notices under section 142(1) of the Act alongwith Annexures were issued to the assessee on 19/09/2019, 05/11/2019, 19/11/2019 and 30/11/2019. 2.5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatement for the financial year 2015- 16 and 2016-17. 2. Please furnish the reasons for cash withdrawal in small amounts in the month of June, 2016. 3. When you are having huge amount of cash (specified bank notes) as on 08.11.2016, then why you have not deposited demonetized currency immediately after demonetization in lump-sum. You have deposited small amounts of cash on different dates during demonetization period. Please explain in detail. 2.11 That in response to above, the assessee furnished written reply on 21/11/2019 which is reproduced below: "1. I have already furnished the cash flow details in my last reply for the FY 2016-17. Cash flow detail for the FY 2015-16 is attached herewith in the pdf cashflow. 2. Regarding "Please furnish the reasons for cash withdrawal in small amounts in the month of June, 2016." The amount is the account closing amount. Due to the inconvenience to climb the ramp or stairs of the bank, I have decided to close the accounts. I think you are aware of the crime rate against senior citizens and crime rates in cash handling. Being a 71 years old lady and my husband being a 81 years old man, it is our usual practice to do cash transactions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y she is making cash withdrawals from her accounts. Thus, it is presumed that the assessee must have utilized the cash for any other purpose. This is not the human behavior and probability when the assessee was having huge cash at home, the assessee was not required to make cash withdrawals. This is against the human behavior and probability. 6. The assessee deposited cash of Rs. 10,46,500/- in seven tranches spread over a period of more than twenty days. 2.13 The Ld. AO in addition to the aforesaid has also observed in the aforesaid assessment order as follows: The assessee has tried its best to justify the source of cash deposit during the demonetization period but none is found to be convincing and acceptable. However, the explanations on various queries raised as regards the genuineness of the source of the cash deposit are not found to be genuine. The demonetization was declared in the evening of 08/11/2016, if the assessee had any genuine cash it could or should have been deposited immediately after declaration of demonetization. Keeping in view the facts of the case and reply filed by the assessee, genuineness of cash deposits of Rs. 10,46,500/- of specified bank note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oney in earlier years and after spending some amounts to meet necessities of life kept back remaining at home. On demonetization happening she the assessee decided to slowly deposit the old currency in her bank account. She did not rush through and instead deposited cash in small tranches spread over a period of time for which Government had given time. Ld. AR contended that spreading deposit of amount is a prudent approach particularly for senior citizen who due to age factors become very apprehensive, suspicious, etc. It was contended that provisions of section 69A of the Act are not applicable as plausible explanation was given. It was also contended that the addition u/s 69A is based on assumption that cash deposits were not explained properly. The assessee has demonstrated that source of cash withdrawals were made before demonetization period and that the bank account details submitted to the Ld. AO were sufficient to establish the legitimate source of these funds. The explanation offered to Ld. AO is plausible, reasonable and prudent. The source of cash is explained as previous withdrawals from bank account of assessee only. Explanation given is that there was accumulation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounts during the demonetization period, therefore, there could have been no justification on his part to have held the cash deposits of Rs. 62 lacs (supra) as the assessee's unexplained money u/s. 69A of the Act. Accordingly, we herein vacate the addition of Rs. 62 lacs made/sustained by the lower authorities. Thus, the Grounds of appeal Nos.1 & 2 raised by the assessee are allowed in terms of our aforesaid observations25. In the result, appeal of the assessee is allowed in terms of our aforesaid observations." 3.4 Lastly Ld. AR contended that the imposition of higher rate of tax u/s 115 BBE of the Act is bad in law. The said section was amended by taxation laws (second amendment) Act 2016. The amendment increased the rate of tax to 60% for income determined under section 68,69,69A, 69B, 69C and 69D effective from 15/12/2016 whereas assessee's deposit occurred before amendment i.e; by 24/11/2016 and therefore the tax rate of 30% (as applicable before the amendment) should have applied. Further if section 69A is not applicable on assessee then the special rate of tax charged by the AO u/s 115BBE of the Act is also not applicable that it would be contrary to the law and provis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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