ITAT Grants Major Relief to Retired Maharashtra Government Employee, Deletes Rs 11.78 Lakh Unexplained Cash Addition Under Section 69A:

The Income Tax Appellate Tribunal (ITAT), Pune Bench, has provided major relief to Uttam Tukaram Gawande, a retired Maharashtra government employee, by deleting an income-tax addition of Rs 11.78 lakh treated as unexplained cash under Section 69A of the Income-tax Act.

The case relates to Assessment Year 2015-16. The Assessing Officer had questioned cash deposits of Rs 11.78 lakh in the assessee's account and treated the amount as unexplained income. The assessee had explained that the money came from retirement benefits, agricultural income and small loans received from various persons.

The Assessing Officer was not satisfied with the explanation. According to the assessment order, the assessee had mainly submitted Aadhaar cards of the people from whom the loans were received, but had not provided sufficient evidence regarding their creditworthiness and the genuineness of the transactions. The addition was subsequently upheld by the first appellate authority.

The assessee then approached the ITAT. The Tribunal also considered that the appeal had been filed 241 days late. After considering the reasons as given by the assessee the Bench found that there was reasonable cause for the delay and condoned the same and allowed the appeal to be heard.

The ITAT while deciding the case on merits observed that the assessee was a senior citizen and retired from the Maharashtra State Government. The Tribunal also noted that he had received retirement benefits to the tune of Rs 16.15 lakh which were not disputed.

The Bench further noted that the assessee owned agricultural land and therefore his claim of agricultural income could not simply be rejected. The assessee had also furnished Aadhaar cards relating to the persons who had allegedly provided the small loans. The Tribunal observed that the Assessing Officer had not taken further steps to verify the source of those loans.

Considering the retirement benefits, agricultural income and petty cash loans together, the Tribunal concluded that the assessee had sufficient funds to explain the source of the Rs 11.78 lakh cash deposit.

As a result, the ITAT deleted the entire Rs 11.78 lakh addition under Section 69A and reversed the finding of the Commissioner of Income Tax (Appeals).

However, the Tribunal did not delete the remaining additions. The assessee had himself declared Rs 2,42,825 as salary income and Rs 41,102 as interest and dividend income in the return filed in response to the notice under Section 148. Therefore, the Tribunal held that the total Rs 2,83,927 would continue to be treated as the assessee's income for the relevant year.

Thus, out of the total addition of Rs 14,61,927, the ITAT deleted Rs 11,78,000 and partly allowed the assessee's appeal.