Case Number: ITA 872/DEL/2021
Appellant: Neeru Jain, Delhi
Respondent: ITO, Ward-67(4), Delhi
Assessment Year: 2017-18
Result: Relief Granted for Unexplained Cash Deposits
Case Filed on: 2021-07-19
Order Type: Final Tribunal Order
Date of Order: 2021-10-14
Pronounced on: 2021-10-14
Neeru Jain, an individual taxpayer, filed her return of income for the assessment year 2017-18 on 28th July 2017, declaring a total income of Rs. 1,14,230/-. The case was selected for scrutiny due to cash deposits made during the demonetization period. The Income Tax Officer (ITO) observed that Neeru Jain had deposited Rs. 2,50,000/- in cash during this period and asked her to explain the source of these deposits.
Neeru Jain explained that the cash deposits were from her accumulated savings as a homemaker and from minor cash gifts received from her parents and in-laws on various occasions like birthdays and anniversaries. However, the ITO did not accept her explanation and treated the entire amount as unexplained cash deposits under section 69A of the Income Tax Act, 1961. The ITO added Rs. 2,50,000/- to her income as unexplained money.
Aggrieved by the ITO’s decision, Neeru Jain appealed to the Commissioner of Income Tax (Appeals) – National Faceless Appeal Centre (NFAC), who provided partial relief by reducing the addition to Rs. 2,00,000/-, thus confirming Rs. 50,000/- as explained. Neeru Jain then filed an appeal with the Income Tax Appellate Tribunal (ITAT), Delhi Bench ‘SMC’, seeking further relief.
Neeru Jain, represented by Shri Ankit Arora, C.A., argued that the entire cash deposit of Rs. 2,50,000/- was accumulated over eight years from household savings and gifts. She contended that the Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs. 2,00,000/-, not considering the Central Board of Direct Taxes (CBDT) Instruction No. 03/2017 dated 21st February 2017, which stated that no verification of cash deposits up to Rs. 2.50 lakh would be made as the source could be household savings.
Neeru Jain’s representative also referred to the decision of the Agra Bench of the Tribunal in the case of Smt. Uma Agrawal vs. ITO (ITA No. 35/AGR/2021 dated 18.06.2021), where similar circumstances were considered, and relief was granted based on the CBDT Circular.
The respondent, represented by Shri R. K. Gupta, Sr. D.R., supported the orders of the lower authorities, maintaining that the partial relief granted by the Commissioner of Income Tax (Appeals) was justified.
The Tribunal, presided over by Sh. Anil Chaturvedi, Accountant Member, examined the submissions and the relevant facts of the case. The key observations are as follows:
Based on the above observations, the Tribunal concluded that the explanation provided by Neeru Jain regarding the source of cash deposits could not be disregarded without concrete evidence to the contrary. The Tribunal directed the deletion of the addition of Rs. 2,00,000/- upheld by the Commissioner of Income Tax (Appeals).
In conclusion, ITA No. 872/DEL/2021 filed by Neeru Jain was allowed, with the Tribunal directing the deletion of the Rs. 2,00,000/- addition made by the lower authorities. The decision highlighted the importance of considering CBDT instructions and relevant case laws in assessing the source of cash deposits during the demonetization period.
Order pronounced in the open court on 14.10.2021.
Sd/- (Anil Chaturvedi)
ACCOUNTANT MEMBER
Date: 14.10.2021
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
Assistant Registrar, ITAT, New Delhi
Neeru Jain vs ITO: Dispute Over Cash Deposits During Demonetization
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