Retired Employee Wins Appeal Against Section 69A Addition for Demonetization Deposits Using Family Settlement Documents

The ITAT Jodhpur allowed the assessee's appeal against additions made under Section 69A for unexplained deposits during demonetization. The assessee, a retired government employee and senior citizen, provided cash flow statements, day-wise withdrawal records, family settlement documents showing wife received Rs. 3,61,000, and wife's affidavit confirming she deposited Rs. 15,59,000 from her own savings in their joint account. The lower authorities doubted these explanations without contrary evidence. The ITAT held that uncontroverted affidavit contents must be accepted as correct, and directed deletion of the Rs. 12,87,100 addition, ruling the assessee's ground was allowed.

---

---

Issues Involved:
1. Validity of the order u/s 143(3) and related proceedings.
2. Addition of Rs. 12,87,100/- u/s 69A as unexplained money.
3. Invocation of provisions of Sec. 115BBE for taxing income at a higher rate.
4. Charging of interest u/s 234A, B, and C.

Summary:

1. Validity of the Order u/s 143(3) and Related Proceedings:
The assessee challenged the legality of the order u/s 143(3) dated 17.12.2019, arguing that the proceedings were barred by limitation and without jurisdiction. However, these grounds were not specifically adjudicated as the primary focus was on the substantive additions made by the AO.

2. Addition of Rs. 12,87,100/- u/s 69A as Unexplained Money:
The AO noted that the assessee deposited Rs. 18,29,500/- during the demonetization period. The assessee claimed the sources were from savings since A.Y. 2012-13 and his wife's savings. The AO accepted Rs. 2,20,000/- as explained and treated Rs. 16,09,500/- as unexplained u/s 69A. The CIT(A) reduced the addition to Rs. 12,87,100/- after considering additional explanations and partial acceptance of the cash flow statements. The Tribunal, considering the affidavit of the assessee's wife and the absence of contrary evidence, directed the deletion of the entire addition of Rs. 12,87,100/-.

3. Invocation of Provisions of Sec. 115BBE:
The assessee argued that invoking Sec. 115BBE for taxing income at a higher rate was erroneous and without issuing a show cause notice. Since the primary addition was deleted, this ground became consequential and was not separately adjudicated.

4. Charging of Interest u/s 234A, B, and C:
The assessee contended that the interest charged u/s 234A, B, and C was contrary to the provisions of law. As the primary addition was deleted, this ground was also consequential and not separately adjudicated.

Conclusion:
The Tribunal allowed the appeal of the assessee, directing the deletion of the addition of Rs. 12,87,100/- and not requiring separate adjudication on the consequential grounds. The order was pronounced under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963.

---