2025 (5) TMI 103 - AT - Income Tax

Unexplained cash deposits made in SBN during demonetisation period - HELD THAT - From a mere reading of order of the CIT(A) it is clear that the appellant had withdrawn a sum of Rs. 17, 42, 000/- during the period commencing from 13.04.2016 to 28.09.2016. There is no evidence that these withdrawals were used for any other purpose. Therefore the amount withdrawn earlier should be treated available for subsequent deposit. Therefore the lower authorities were not justified in making addition of Rs. 4, 83, 500/- as unexplained money of the assessee. Accordingly the orders of the lower authorities are hereby set aside and direct the AO to delete the addition. Appeal filed by the assessee stands allowed.

Summary

Summary:The appellant, an individual with pension income, challenged the addition of Rs. 4,83,500/- made by the AO under section 143(3) of the Income Tax Act, 1961, relating to cash deposits in Specified Bank Notes (SBN) during the demonetisation period for AY 2017-18. The CIT(A) had confirmed the addition, holding that the appellant did not satisfactorily explain the source of the deposits.The Tribunal noted a 112-day delay in filing the appeal but condoned it on medical grounds, as supported by a medical certificate and unchallenged by the Revenue.On merits, the Tribunal held that the appellant had withdrawn Rs. 17,42,000/- between 13.04.2016 and 28.09.2016, with no evidence these funds were used otherwise. Thus, the withdrawn amount was available for the subsequent SBN deposits. The Tribunal found that the lower authorities were "not justified in making addition of Rs. 4,83,500/- as unexplained money." Accordingly, the Tribunal set aside the orders of the AO and CIT(A) and directed deletion of the addition.The appeal was allowed.