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of <h1>73-year-old pensioner wins appeal against Rs. 4 lakh unexplained cash deposit addition after proving loan repayment</h1> <h3>Madhavan Suram Versus Deputy Commissioner of Income Tax, Circle-1, Nellore</h3> Madhavan Suram Versus Deputy Commissioner of Income Tax, Circle-1, Nellore - TMI Issues involved:The issues involved in the judgment include determination of unexplained cash deposits, application of section 115BBE of the Income Tax Act, credibility of the assessee's explanations, and the treatment of evidence provided by the assessee in relation to the disputed cash deposit.Unexplained Cash Deposits:The case involved unexplained cash deposits of Rs. 18,00,000 in the bank account of the assessee, a retired individual. The Assessing Officer accepted the explanation for a portion of the deposit but added Rs. 4,00,000 as 'income from other source' due to lack of explanation and documentary evidence provided by the assessee.Application of Section 115BBE:The Assessing Officer applied the provisions of section 115BBE of the Income Tax Act to the unexplained cash deposits. The section deals with taxation of income at a flat rate in cases where the Assessing Officer is not satisfied with the explanation provided by the assessee.Credibility of Assessee's Explanations:The Commissioner of Income Tax (Appeals) did not find the assessee's explanation regarding the unexplained cash deposit of Rs. 4,00,000 to be credible. The CIT(A) raised doubts about the memory of the assessee, who was a senior citizen, and refused to accept the affidavit of the debtor as evidence due to procedural reasons.Treatment of Evidence Provided by Assessee:The assessee provided evidence, including a bank withdrawal entry and an affidavit from the debtor, to support his explanation for the disputed cash deposit. The Judicial Member of the ITAT Hyderabad found the evidence to be genuine and concluded that the addition of Rs. 4,00,000 should be deleted as the total income of the assessee was below the threshold limit.In conclusion, the ITAT Hyderabad allowed the appeal of the assessee, directing the Assessing Officer to delete the addition of Rs. 4,00,000 based on the genuine evidence provided by the assessee. The judgment emphasized the importance of considering the circumstances of the case, the age of the assessee, and the credibility of the explanations given, while ensuring fair treatment and avoiding prejudice in tax assessments.
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