Shantha Ravindra vs. ITO

Parties Involved

Facts Summary

For the Assessment Year 2017-18, the assessee filed an income return on 07.11.2017, declaring a total income of Rs.4,58,700/- under the heads 'Income from House Property' and 'Income from Other Sources'. The assessment was selected for scrutiny to examine the source of cash deposits made during the demonetization period. The assessee submitted that she was constructing a commercial building and had availed a loan from Vijaya Bank. She claimed that cash withdrawn for the purpose of construction and the unspent portion of cash was redeposited during the demonetization period. The Assessing Officer treated the entire cash deposits amounting to Rs.15,14,000/- as unexplained and brought the same to tax under section 69A of the Income Tax Act, 1961. The assessee appealed to the First Appellate Authority, which partly allowed the appeal by giving credit of Rs.2,50,000/-. The assessee further appealed to the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Whether the CIT(A) was correct in restricting the addition to Rs.12,64,000/- out of Rs.15,14,000/- made by AO in respect of cash deposits made during the demonetization period?
• 2. Whether the CIT(A) and AO have not appreciated the fact that the cash deposits are out of cash withdrawal in the same bank account during the year?
• 3. Whether the CIT(A) and AO have erred in considering the explanation given by the Appellant that the cash was withdrawn out of the housing loan amount during the year and the same was re-deposited during the demonetization period?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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