Case Number: ITA 960/DEL/2021
Appellant: Om Prakash Nahar, New Delhi
Respondent: ITO Ward-67(2), New Delhi
Assessment Year: 2017-18
Result: 2017-18
Case Filed on: 2021-08-11
Order Type: Final Tribunal Order
Date of Order: 2022-01-27
Pronounced on: 2022-01-27
Tribunal: IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH “E”: NEW DELHI
Before: Shri Amit Shukla, Judicial Member & Dr. B.R.R. Kumar, Accountant Member
Introduction
This appeal was filed by Om Prakash Nahar against the order dated 20.12.2019, passed by the National Faceless Appeal Centre (NFAC) for the assessment year 2017-18. The main issue in this case was the addition made by the Assessing Officer (AO) regarding cash deposits during the demonetization period, which was contested by the appellant.
Background
The appellant, Om Prakash Nahar, a senior citizen and retired government servant, deposited cash amounting to Rs. 63,63,000 in his bank account during the demonetization period. The Assessing Officer issued a notice under Section 143(2) of the Income Tax Act to verify the cash deposits. The appellant explained that the cash deposits were made from his withdrawals over the years due to his serious illness and old age. However, the AO rejected this explanation and made an addition of Rs. 63,63,000 under Section 69A/115BB of the Act, considering the cash deposits as unexplained income.
Key Issues and Arguments
The appellant raised several grounds of appeal, including:
Tribunal’s Analysis and Findings
The tribunal noted that the appellant, aged 79, had withdrawn substantial amounts of cash from his bank account over the years, which were kept at home for emergencies due to his medical condition. The withdrawals made from 2014 to 2016 exceeded the amount deposited during the demonetization period. The appellant provided a detailed cash flow statement, showing withdrawals and deposits, which the tribunal found reasonable and plausible.
The tribunal also noted that the CIT(A) had given partial relief by restricting the addition to Rs. 44,13,000, considering the withdrawals made from April 2016 to November 2016. However, the tribunal found that the appellant’s explanation regarding his habit of keeping cash due to medical emergencies and old age was reasonable. The tribunal concluded that there was no evidence to suggest that the cash deposits were from undisclosed sources.
Judgment
The tribunal allowed the appeal, deleting the addition of Rs. 44,13,000 made by the CIT(A) and accepted the appellant’s explanation regarding the source of the cash deposits.
Conclusion
The appeal filed by Om Prakash Nahar was allowed, and the addition of Rs. 44,13,000 was deleted. The tribunal accepted the appellant’s explanation that the cash deposits during the demonetization period were made from the withdrawals over the years due to his medical condition and old age.
Final Judgment
Order pronounced in the open court on 27.01.2022.
Signed:
Dr. B.R.R. Kumar, Accountant Member
Shri Amit Shukla, Judicial Member
Dated: 27.01.2022
Copy forwarded to:
Assistant Registrar, ITAT, New Delhi
Relevant Legal Provisions and Precedents
This case centered around the procedural aspects of verifying cash deposits during the demonetization period under Section 69A/115BB of the Income Tax Act. The appellant’s detailed explanation and supporting evidence regarding the source of the cash deposits were crucial in obtaining a favorable judgment.
Impact of the Judgment
This judgment highlights the importance of maintaining detailed records and providing a plausible explanation for cash deposits, especially during periods of scrutiny like demonetization. It also underscores the significance of procedural fairness and the necessity of providing adequate opportunity for representation.
Key Takeaways
The case emphasizes the importance of substantiating cash deposits with clear and plausible explanations, supported by detailed records. It serves as a precedent for similar cases, reinforcing the need for procedural fairness and the acceptance of reasonable explanations based on factual evidence.
Om Prakash Nahar vs ITO Ward-67(2): Cash Deposits During Demonetization for AY 2017-18
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