Elderly lady's unexplained cash deposit addition under section 69A reduced from Rs. 25 lakhs to Rs. 5 lakhs

ITAT Hyderabad partly allowed the appeal regarding addition under section 69A for unexplained cash deposits during demonetization. The assessee, an elderly lady, deposited Rs. 25 lakhs and transferred it to her daughter's account. The tribunal noted her declared income over five years totaled Rs. 34 lakhs, indicating capacity to accumulate savings. However, considering practical expenses and lack of active banking prior to demonetization, the tribunal reduced the addition from Rs. 25 lakhs to Rs. 5 lakhs on estimation basis, deleting Rs. 20 lakhs from the assessment.

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Issues Involved:
The appeal concerns the addition of Rs. 25,00,000 as unexplained money under section 69A of the Income Tax Act, 1961, made by the Assessing Officer and upheld by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi.

Summary:

Issue 1: Addition of Rs. 25,00,000 as unexplained money
The appellant, an individual, declared a total income of Rs. 7,73,469 for A.Y. 2017-18, but the Assessing Officer added Rs. 25 lakhs as unexplained money deposited in the bank account. The appellant claimed the amount was from rental income earned over two decades. The Commissioner upheld the addition, citing lack of substantiation. The appellant argued that as an old lady not well-versed in banking, she saved cash for family needs. The Tribunal found the explanation partly credible, considering the appellant's history of income tax filings and social status. Ultimately, Rs. 5 lakhs of the addition was confirmed, and the remaining Rs. 20 lakhs were deleted, granting partial relief to the appellant.

Conclusion:
The Tribunal partially allowed the appeal, confirming Rs. 5 lakhs of the addition and deleting Rs. 20 lakhs, based on the appellant's explanation of the source of the deposited amount from rental income and her circumstances as an elderly individual.

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