TaxTMI 
TaxTMI 
2026 (5) TMI 475
X X X X Extracts X X X X
X X X X Extracts X X X X
....d for filling of details of source of cash deposit but no reply was filed by the assessee. Further penalty notice u/s 272A(1)(d) was issued to assessee for non-compliance of notice issued u/s 142(1) but still no reply was filed by the assessee. Further to another penalty notice u/s 272A(1)(d) issued, assessee filed a reply and bank account statement and stated that she is salaried person employed in the Department of Biotechnology and am maintaining my bank account in the State Bank of India, Lodi Estate Branch, New Delhi. She further submitted that the sources of sources of cash deposit is cash withdrawal from my savings account. However, after perusing the bank statement, the AO was not satisfied with the details and asked for the assessee to give the narration of the some debit and credit entries but no reply was filed. Accordingly, the AO observed that during the year the assessee had deposited cash of Rs. 12,08,000/- during demonetization period. Since the assessee has not filed any documentary evidence in support of her claim of source of cash deposit in bank account, therefore, the AO added the amount of Rs. 10,43,000/- back to the income of the assessee as unexplained money....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ugh her savings only and due to some contextual appellant has made such withdrawals of cash and again due to coincidental appellant force to deposit back the cash withdrawn. 3. That on the facts and in the circumstances of the case, the learned AO erred in including interest paid on housing loan, initially in assessment order dated 25.12.2019 the learned AO has allowed the interest paid on housing loan but in rectification order dated 13.01.2020 the same has been disallowed. 4. That the tax liability raised by the AO vides the Computation Sheet attached to the impugned Assessment Order is erroneous." 5. At the time of hearing, ld. AR of the assessee brought to our attention brief facts of the case and also submitted his submissions which were narrated in the detailed written submissions and the same is reproduced below :- A. Key Facts 1. The appellant is a salaried individual employed as Scientist 'E' in the Department of Biotechnology, Government of India. The return of income for A.Y. 2017-18 was filed declaring total income of Rs.8,01,480/-. The case was selected for scrutiny on account of cash deposits during the demonetization period. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2. No finding that withdrawals were spent elsewhere 3. Mere suspicion cannot replace evidence 4. Addition u/s 69A requires ownership + unexplained nature Further, Learned CIT(A) has confirmed the addition mainly on the ground that: * Mere withdrawals do not prove continuity of cash * No cash book maintained * Small withdrawals before demonetization show absence of cash balance * Time gap between withdrawal (July/August) and deposit (December) * CIT Vs Baldevraj Charla and others 121 TTJ 0366 Delhi TS- 5893-ITAT -2008 (Delhi) date of order 29.12.2008: ITAT held that merely because there was a time gap between the withdrawal and corresponding cash deposit, the assessee' s explanation not be rejected, and hence the addition confirmed by the Ld. CIT(A) is not correct. * DCIT Vs Veena Awasthi Lucknow ITAT TS-10298- ITAT - 2018: ITAT held that there is no law in the country which prevents citizens from frequently withdrawing and depositing his own money into the bank account held by them. * Gordhan Vs ITO Delhi - ITAT TS-6602-ITAT - 2015 (Delhi): ITAT held that no addition can be made on ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Learned CIT(A) has erred in sustaining the addition merely on the basis of a time gap between withdrawal and redeposit of cash. Withdrawal: July-August 2016 Deposit: December 2016 Time Gap: Approximately 4 months It is respectfully submitted that the existence of a time gap, by itself, cannot be a valid ground for making or sustaining an addition under Section 69A of the Act. Numerous decisions of the Hon'ble ITATs and Hon'ble High Courts have consistently held that, the case laws on identical facts and circumstances have already been cited hereinabove and form part of the present submission; Mere time gap between withdrawal and redeposit of cash does not automatically justify an addition; There is no statutory requirement under the Income-tax Act mandating immediate redeposit of withdrawn cash; An individual is legally entitled to retain cash at home for personal, household, or business contingencies. In the present case, the Learned CIT(A) has failed to properly appreciate and distinguish the binding judicial precedents cited by the Appellant and has not provided any cogent reasoning for disregard....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e bank account prior to demonetization and the assessee had sufficient cash balance available out of regular salary income and earlier bank withdrawals. Further we observed from the bank statement that the withdrawals made prior to demonetization were duly reflected in the bank statement and the same redeposited during demonetization and the same does not represent any unexplained income. Further we observed that the AO made the addition merely on the ground of alleged non-compliance and absence of detailed explanation during assessment proceedings, however, no independent inquiry has been conducted to establish that the cash deposited were from undisclosed sources. Further we also observed that it is settled law that addition u/s 69A can be made only when the assessee is found to be the owner of unexplained money and fails to offer a satisfactory explanation and in the present case, the explanation is reasonable, supported by salary income and prior withdrawals. Further we observed that the assessee being a salaried government employee with disclosed sources of income, there is no justification for invoking section 69A. Further we observed that in the case of CIT vs Baldevraj Char....