Deposit of cash kept for medical emergencies during demonetisation cannot be held unexplained: ITAT
The facts relating to the issue are stated in brief. The assessee is a retired army officer and is drawing pension. During demonetisation period the assessee deposited a sum of Rs.7,01,000/- in aggregate in two bank accounts. With asked about the sources, the assessee submitted that he had withdrawn cash on 05.06.2015 to the tune of Rs.8,00,000/- from ICICI Bank and has kept the cash with him.
It was submitted that he has kept the money in hand in order to meet emergency medical treatment, as he is suffering from heart disease. The AO took the view that the assessee, being an army officer, is provided with free treatment facilities and hence the claim of keeping of cash at home is not acceptable. The AO has also noticed that the assessee has made deposits and withdrawals subsequent to the date of withdrawal of Rs.8,00,000/- from his bank account. Accordingly, he assessed the amount of Rs.7,01,000/- as unexplained cash under Section 69A of the Income Tax Act, 1961 (hereafter “the Act”). The learned CIT(A) also confirmed the same.
A perusal of copies of the bank account placed in the paper book showed that the assessee has withdrawn a sum of Rs.8,00,000/- from his bank account maintained with ICICI Bank on 05.06.2015. ITAT noticed that the assessee has withdrawn cash in small amounts in subsequent period also. Since the assessee is an aged person and retired from army, it is quite possible that the assessee had kept the money in cash with him in order to meet medical emergencies. The assessee is a pensioner and there is no other material to show that the cash of Rs. 8,00,000/- withdrawn earlier had been spent away.
Accordingly, in the facts and circumstances of the case, ITAT opined that the explanation of the assessee that he has made the deposit of Rs.7,01,000/- out of the cash withdrawal made earlier is quite plausible.
Accordingly, the order passed by the learned CIT(A) and direct the AO was set aside.
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