TaxTMI 
TaxTMI 
2025 (2) TMI 938
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....ed system of selection (cass) to verify cash deposit during the demonetization period." 2.3 That a statutory notice u/s 143(2) of the Act was issued on 24/09/2018 by the then ITO, Ward-3, Rohtak. Later on the case was transferred to the Income Tax Officer, Ward-3, Ambala vide letter No. 5732 dt. 07/08/2019 and the ITO Ward-3, Ambala, transferred the case to ITO, Ward-5, Ambala. 2.4 That thereafter, notices under section 142(1) of the Act alongwith Annexures were issued to the assessee on 19/09/2019, 05/11/2019, 19/11/2019 and 30/11/2019. 2.5 That the assessee filed reply on portal on 27/09/2019, 22/10/2019, 14/11/2019, 21/11/2019, 28/11/2019, 03/12/2019 and 12/12/2019. 2.6 That the Income Tax Department called for Bank statement under section 133(6) of the Act, alongwith KYC in formation from following banks: Sr. No. Name of the Bank Address of the bank Address of the Bank 1. Oriental Bank of Commerce Hissar Road, Ambala City 2. Bank of Baroda Court Road, Ambala City 3. Punjab and Sind Bank Dev Samaj College Road, Ambala City 4. Punjab National Bank Near Court Road, Ambala City 5. State Bank of India Court Road, Amba....
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...., the assessee furnished written reply on 21/11/2019 which is reproduced below: "1. I have already furnished the cash flow details in my last reply for the FY 2016-17. Cash flow detail for the FY 2015-16 is attached herewith in the pdf cashflow. 2. Regarding "Please furnish the reasons for cash withdrawal in small amounts in the month of June, 2016." The amount is the account closing amount. Due to the inconvenience to climb the ramp or stairs of the bank, I have decided to close the accounts. I think you are aware of the crime rate against senior citizens and crime rates in cash handling. Being a 71 years old lady and my husband being a 81 years old man, it is our usual practice to do cash transactions in small amounts so that we may remain safe and secure. 3. I have not deposited demonetized currency immediately after demonetization in lump-sum but it has been deposited with in due course of time much earlier from the given time limit of 31.12.2016. Being a 71 years old lady and my husband being a 81 years old man and out of our usual practice, we have decided to deposit it in small amounts so that we may remain safe. Although it was not an easy job for....
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....ead over a period of more than twenty days. 2.13 The Ld. AO in addition to the aforesaid has also observed in the aforesaid assessment order as follows: The assessee has tried its best to justify the source of cash deposit during the demonetization period but none is found to be convincing and acceptable. However, the explanations on various queries raised as regards the genuineness of the source of the cash deposit are not found to be genuine. The demonetization was declared in the evening of 08/11/2016, if the assessee had any genuine cash it could or should have been deposited immediately after declaration of demonetization. Keeping in view the facts of the case and reply filed by the assessee, genuineness of cash deposits of Rs. 10,46,500/- of specified bank notes is not proved. Hence; addition of Rs. 10,46,500/- is made to the taxable income of the assessee u/s 69A of the Income Tax Act, 1961. The assessee had failed to prove this fact that the cash deposited during demonetization period are normal receipts and therefore, I hold that the cash deposited during demonetization period, represents income from undisclosed sources and the same is covered under th....
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....nded that spreading deposit of amount is a prudent approach particularly for senior citizen who due to age factors become very apprehensive, suspicious, etc. It was contended that provisions of section 69A of the Act are not applicable as plausible explanation was given. It was also contended that the addition u/s 69A is based on assumption that cash deposits were not explained properly. The assessee has demonstrated that source of cash withdrawals were made before demonetization period and that the bank account details submitted to the Ld. AO were sufficient to establish the legitimate source of these funds. The explanation offered to Ld. AO is plausible, reasonable and prudent. The source of cash is explained as previous withdrawals from bank account of assessee only. Explanation given is that there was accumulation of amount by a senior citizen due to several concerns like safety, feeling of uncertainty etc. The core evidence of source is earlier withdrawal from bank of assessee itself of earlier years. The Ld. CIT(A) also failed to appreciate that no evidence has been brought on record by the AO to prove that the funds deposited during demonetization period were from unexplaine....
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....sustained by the lower authorities. Thus, the Grounds of appeal Nos.1 & 2 raised by the assessee are allowed in terms of our aforesaid observations25. In the result, appeal of the assessee is allowed in terms of our aforesaid observations." 3.4 Lastly Ld. AR contended that the imposition of higher rate of tax u/s 115 BBE of the Act is bad in law. The said section was amended by taxation laws (second amendment) Act 2016. The amendment increased the rate of tax to 60% for income determined under section 68,69,69A, 69B, 69C and 69D effective from 15/12/2016 whereas assessee's deposit occurred before amendment i.e; by 24/11/2016 and therefore the tax rate of 30% (as applicable before the amendment) should have applied. Further if section 69A is not applicable on assessee then the special rate of tax charged by the AO u/s 115BBE of the Act is also not applicable that it would be contrary to the law and provisions of the Act to apply the same. Reliance was placed on judgment of Hon'ble Supreme Court of India in case of CIT(Central)-1, New Delhi Vs. Vatika Township (P) Ltd. reported in (2024) 367 ITR 466 (SC). 3.5 Per contra, the Ld. DR has supported the order of Assessment and the ....