Senior Citizen Deposited Rs 30.55 Lakh Cash, Faced Income Tax Scrutiny; He Fought Back and Won Partial Relief in ITAT Delhi

The ITAT Delhi, in a recent significant ruling, has granted major relief to the taxpayer in the Rs 30.55 lakh unexplained cash deposits case by restricting the addition to just Rs 20 lakh.

During the assessment year 2019-20, the assessee who was a Senior Citizen,  had made certain cash deposits into his bank account maintained with Axis Bank. The tax authorities treated it the same as unexplained cash deposits and made an addition of Rs 30.55 lakh.

The assessee had properly justified the cash deposits in question. It was flagged that on June 15, 2018, a search operation took place in relation to the assessee; however, nothing incriminating was found against him. It was also noted that the assessee had made the impugned cash deposits into his bank account in the time period between June, 2018, and February 2019.

Explaining the source of the same, the assessee claimed that “the same is related to cash withdrawals of Rs 29.75 lakh made by the assessee from the said bank account on earlier occasions between the period of September, 2019, and January, 2019, and amounts received from relatives as gifts plus cash withdrawals of other family members.”

On this claim of the assessee, the tax authorities stated that as the assessee had no details for the reason of withdrawal, details of gifts, etc., were coming from the assessee, the impugned addition was justified and hence should not be quashed.

When the aggrieved assessee filed an appeal before the CIT(A), the impugned additions were confirmed. Thereafter, the assessee approached the ITAT Delhi. When the entire case was analysed, the tribunal found it fair to restrict the addition to Rs 20 lakh considering the impugned anomalies and discrepancies and absence of any firm evidence. Accordingly, the impugned addition of Rs 10.55 lakh out of the total addition of Rs 30.55 lakh was deleted.