Tribunal Accepts Assessee's Explanation, Deletes Addition of Demonetized Cash Deposits; Appeal Fully Allowed

The Tribunal allowed the appeal of the assessee, a non-resident, regarding the addition of demonetized cash deposits. Initially, the AO treated Rs. 15.08 lakhs as unexplained income, but the CIT(A) reduced this to Rs. 7.54 lakhs. Upon appeal, the Tribunal accepted the assessee's explanation, particularly noting prior family withdrawals, and deleted the remaining addition. This decision underscores the Tribunal's acceptance of the assessee's justification for the cash deposits, leading to the full allowance of the appeal.

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Issues involved:
The only issue in this appeal is the addition of demonetized cash deposit by the Commissioner of Income Tax (Appeals) and the subsequent appeal by the assessee challenging the same.

Summary:

Issue 1 - Addition of demonetized cash deposit:
The assessee, a non-resident, filed a return of income for the assessment year 2017-18, admitting total income at Rs. 2,10,880/-. The assessment was framed by the Income Tax Officer, Chennai, under section 143(3) of the Income Tax Act, 1961, based on demonetized cash deposit of Rs. 15.08 lakhs in the savings bank account. The AO treated the cash deposit as unexplained and taxable under section 115BBE. The CIT(A) restricted the addition to Rs. 7.54 lakhs, considering the explanation and availability of funds. The Tribunal noted the family withdrawals totaling Rs. 42,38,100/-, including a withdrawal of Rs. 15 lakhs in March 2015, before demonetization. The Tribunal accepted the cash deposit of Rs. 15 lakhs as explained, deleting the balance addition of Rs. 7.54 lakhs confirmed by the CIT(A) and allowed the appeal of the assessee.

Separate Judgment:
The Tribunal, after considering the facts and circumstances of the case, accepted the explanation provided by the assessee regarding the demonetized cash deposit, leading to the deletion of the balance addition confirmed by the CIT(A).

This judgment highlights the meticulous consideration of evidence and financial transactions to determine the legitimacy of a demonetized cash deposit, ultimately resulting in the allowance of the assessee's appeal.

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