Tribunal overturns decision, directs deletion of addition under Income Tax Act

The Tribunal allowed the appeal, overturning the CIT(A)-NFAC's decision and directing the deletion of the addition made under section 69A of the Income Tax Act. The Tribunal considered the withdrawn amount from the bank in the past two years, which could have been used for the cash deposit during demonetization, taking into account the age and circumstances of the assessee.

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Issues:
Appeal against addition under section 69A of the Income Tax Act for A.Y. 2017-18.

Analysis:
1. Delay in filing appeal: The appeal filed by the assessee was delayed by 93 days, attributed to the pandemic situation. The assessee submitted a condonation application, which was accepted after considering the reasons for delay. The appeal was admitted for adjudication upon condonation of the delay.

2. Assessment of unexplained cash deposit: The Assessing Officer noted a cash deposit of Rs.11,14,477 in the assessee's bank account and sought explanations. The assessee provided details attributing the deposit to past savings, loans, and advances. While a portion was accepted, Rs.7,60,000 remained unexplained. The Assessing Officer held that only Rs.2,50,000 was accounted for, adding Rs.4,72,523 as unexplained money under section 69A.

3. CIT(A)-NFAC decision: The CIT(A)-NFAC upheld the addition, emphasizing the need for a satisfactory explanation for cash deposits post-demonetization. The CIT(A) considered the age and pension status of the assessee but confirmed the Assessing Officer's decision, stating that only Rs.2,50,000 could be explained out of the total deposit.

4. Tribunal's decision: The Tribunal considered the arguments of both parties and the facts of the case. Acknowledging the age and pension status of the assessee, the Tribunal found merit in the contention that the withdrawn amount of Rs.9,94,862 from the bank in the past two years could have been used for the deposit during demonetization. Consequently, the Tribunal set aside the CIT(A)-NFAC's decision and directed the Assessing Officer to delete the addition of Rs.4,72,523. The appeal by the assessee was allowed.

In conclusion, the Tribunal overturned the CIT(A)-NFAC's decision and directed the deletion of the addition made by the Assessing Officer under section 69A of the Income Tax Act. The Tribunal's decision was based on the argument that the withdrawn amount from the bank in the past could have been utilized for the cash deposit during demonetization, considering the age and circumstances of the assessee.

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