GANAPATHY PANNEERSELVAM,CHENNAI V. THE INCOME TAX OFFICER, NON CORP. WARD 19(4), CHENNAI, CHENNAI

ITA 609/CHNY/2025

AI Insights

The case involves Ganapathy Panneerselvam, who appealed against the order of the Commissioner of Income Tax (Appeals), which sustained the addition of Rs.15,10,500 as unexplained income under section 69 of the Income-tax Act, 1961. The addition was initially made by the Income Tax Officer following the assessment of cash deposits made during the demonetization period. The assessee argued that these deposits were from previously withdrawn cash intended for family expenses, including marriages. The Tribunal examined the explanations and evidence provided by the assessee, including bank statements and cash flow statements, and found them satisfactory, leading to the allowance of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 668615 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Other Referred Cases: S.R. Venkata Ratnam v. CIT, Smt.P.Padmavathi v. ITO, CIT v. K. Sreedharan, Jaya Aggarwal v. ITO
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RESPONDENTS NOS; SITA KRISHNAMOORTHY; J. C.I.T
• Assessee Lawyers: R. VENKATA RAMAN; R.S. LAKSHMI NARAYANA
• Keywords: Set aside; Question of law; Onus to prove; Gift
• Section: 69

Judgement Text

" आयकर अपीलीय अिधकरण, ‘ए’ Ɋायपीठ, चेɄई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI ŵी जॉजŊ जॉजŊ क े, उपाȯƗ एवं ŵी एस.आर.रघुनाथा, लेखा सद˟ क े समƗ BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENT AND SHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.:609/Chny/2025 िनधाŊरण वषŊ / Assessment Year: 2017-18 Ganapathy Panneerselvam, Old No.19, New No.49, Chetty Street, Saidapet West, Chennai – 600 015. vs. The Income Tax Officer, Non-Corp. Ward -19(4), Chennai. [PAN:BIKPP-3640-L ] (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से/Appellant by : Shri. R. Venkata Raman, C.A. & Shri. R. S. Lakshmi Narayana, Advocate ŮȑथŎ की ओर से/Respondent by : Ms. Sita Krishnamoorthy, J.C.I.T. सुनवाई की तारीख/Date of Hearing : 12.06.2025 घोषणा की तारीख/Date of Pronouncement : 27.06.2025 आदेश /O R D E R PER S. R. RAGHUNATHA, AM : This appeal by the assessee is directed against the order dated 22.01.2025 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, arising from the assessment order dated 28.06.2019 passed u/s.143(3) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) by the Income Tax Officer, Non-Corporate Ward 14(3), Chennai, for the assessment year 2017-18. 2. The assessee has raised the following grounds of appeal: :-2-: ITA. No:609/Chny/2025 1. That the Learned Commissioner of Income Tax (Appeals), NFAC, Delhi (“Ld. CIT(A)”) is not justified in sustaining the addition of Rs.15,10,500/- made by the Assessing Officer, treating the cash deposits in the bank account during the demonetization period as unexplained income u/s.69 of the Act. 2. That the Ld. CIT(A) failed to appreciate that the provisions of section 69 of the Act are not applicable to the facts and circumstances of the case of the appellant. 3. That the Ld. CIT(A) failed to appreciate that the cash deposits in the bank account during the demonetization period were sourced out of previous cash withdrawals, hence the same are duly explained and addition u/s.69 of the Act is unwarranted. 3. The brief facts of the case are that the assessee an individual earning interest income, filed his return of income for the assessment year 2017-18 on 14.03.2018, declaring a total income of Rs.9,94,670/-. The return was duly processed u/s.143(1) of the Act. Subsequently, the case was selected for limited scrutiny under CASS to examine cash deposits made during the demonetization period. Accordingly, a notice u/s.143(2) of the Act was issued on 10.08.2018, followed by a notice u/s.142(1) of the Act on 10.05.2019. 4. During the demonetization period, the assessee deposited cash amounting to Rs.15,10,500/- in his bank account maintained with M/s. Karur Vysya Bank, Velachery Branch, Chennai. During the course of the assessment proceedings, the Assessing Officer issued a show-cause notice requiring the assessee to explain the source of these cash deposits. In response, the assessee submitted that the deposits were made from cash previously withdrawn from his bank account. It was explained that the withdrawals were intended to meet expenses related to his son’s marriage and other personal needs. However, the unutilized amount of Rs.15,10,500/- was subsequently re-deposited into the same bank account during the demonetization period. The assessee's submission before the Assessing Officer was as under: :-3-: ITA. No:609/Chny/2025 “I am aged and unemployed person having to take care of my family. I have no other income except the interest received from the fixed deposits made out of the gift amount received from my brother. For family expenses and for any special occasions or functions I withdrew the amount and spend for my family. During the financial years 2014-15 and 2015-16 I planned for marriage of my daughter and for my son. As planned my daughter was got married on 18/06/2014. But for my son Mr.P.Harikumar, now aged 36 years was engaged and was dropped due to unsolicited reasons. The amount drawn during the period for the marriages and for other family functions was kept in cash on hand and the same was redeposited in the bank during demonetization period. The following are the cash withdrawal details from the bank: Date of withdrawal Amount (Rs.) 10/05/2015 2,00,000 29/05/2015 4,00,000 18/06/2015 4,00,000 03/08/2015 4,00,000 31/08/2015 4,00,000 06/09/2015 4,00,000 29/09/2015 4,00,000 31/10/2015 4,00,000 23/11/2015 4,00,000 19/02/2016 4,00,000 29/04/2016 50,000 29/05/2016 4,00,000 TOTAL 42,50,000 As I draw the cash amount for my family expenses and for the family functions only and the amount of cash left in hand was only redeposited of Rs.15,10,500/- in cash in the bank. I humbly submit that there was no other source of income for me. I am withdrawing the cash from the bank to run my family day to day requirements and commitments. I request your goodselves to consider the above facts and complete the assessment at the earliest.” 5. The assessee made further submission before the Assessing Officer as under: “In continuation to my discussion with you on 14/06/2019, I submit the following for your kind perusal: :-4-: ITA. No:609/Chny/2025 I had withdrawn cash from the bank during the years 2015 and 2016 of Rs. 42,50,000/-, as I explained in my earlier replies and submissions, I spent the amount for family maintenance and for family functions. The breakup of the expenditure: S.No. Particulars Amount (Rs.) 1 Jewellery Purchase (Copy of bills attached) 9,89,317 2 Medical Expenses (Copy of bills attached) 39,455 3 Furniture expenses (Copy of bills attached) 1,61,200 4 LIC Premium paid 21,840 5 Amount deposited in Bank 15,10,500 TOTAL 27,22,312 Besides the expenditure as mentioned above, during the period my daughter was miscarried once and delivered baby. The drawn amount was used for the Hospital expenses and for the family functions. Apart from this, my family expenditure per month will be approximately Rs.1.00 lakh per month including medical and other expenditure. Once again I submit to your goodselves that the amount drawn from the bank is only for my family expenses. I humbly submit that there was no other source of income for me. I am withdrawing the cash from the bank to run my family day to day requirements and commitments. I request your goodselves to consider the above facts and complete the assessment at the earliest.” 6. The assessee, therefore, explained before the AO that the cash deposits made during the demonetization period represented the re-deposit of unutilized cash previously withdrawn from the same bank account. In support of this explanation, the assessee submitted bank statements reflecting the cash withdrawals, along with bills and supporting documents for the expenses incurred for the stated purpose. However, the AO was not satisfied with the explanation provided and proceeded to conclude the assessment by treating the cash deposits of Rs.15,10,500/- as unexplained. Consequently, an addition u/s.69 of the Act was made, and an order was passed u/s.143(3) of the Act on 28.06.2019, with the following findings: :-5-: ITA. No:609/Chny/2025 “The assessee states that the money was withdrawn for his son’s marriage and family function and the leftover of Rs.15,10,500/- was re-deposited. However, the withdrawals were made over a period of twelve months & 18 months prior to the claim of re-deposit in bank A/c. As a general rule of thumb cash is only withdrawn when there is none available for spending. So to suggest that the assessee kept on withdrawing cash while it accumulated in his hand, until he re-deposited the same is incredible. The assessee also states that he has no other source of income except interest income. However the deposit of Rs.15,10,500/- was made during the demonetization period, after a lapse of six months from the last withdrawals. No prudent person would hold such amount of cash for an extended period and forgo the interest that could have been earned, especially when he has no other source of income except interest income. Further the claim of assessee that such withdrawals was made during May 2015 to May 2016 for meeting expenses, in connection with son’s marriage is also farfetched. Thus the sum of cash deposit made in bank A/c during 08.11.2016 to 31.12.2016 stands unexplained. Hence it is added u/s 69.” 7. Aggrieved by the order of the AO, the assessee preferred an appeal before the ld. CIT(A), NFAC. 8. During the course of appellate proceedings, the assessee furnished a detailed cash flow statement, daily cash balances, and corresponding extracts from the cash book, thereby demonstrating the consistent availability of sufficient cash in hand prior to each deposit made into the bank account. It was explained that the cash deposits during the demonetization period were sourced from earlier cash withdrawals aggregating to Rs.47,58,000/- made from the same bank account over the financial years 2014-15 to 2016-17. In support of this claim, the assessee submitted the relevant bank statements corroborated by the cash flow statement. It was further explained that the withdrawals were primarily intended to meet various family obligations and events, including the marriage of the assessee’s daughter in June 2014 and the proposed (but later cancelled) marriage of the assessee’s son in early 2016. To substantiate the actual application of funds, the assessee furnished documentary evidence including bills for jewellery, furniture, medical expenses, LIC premium payments, and household expenses, amounting to Rs.32,19,812/-. After :-6-: ITA. No:609/Chny/2025 accounting for these expenditures, the assessee maintained that an unutilized cash balance of Rs.15,38,188/- remained available, out of which Rs.15,10,500/- was redeposited into the bank account during the demonetization period. It was further pointed out that there was no instance of negative cash balance at any point, and the cash flow statement adequately explained the availability of funds at the time of each deposit. The assessee also relied on various judicial precedents to contend that in the absence of any contrary evidence or finding by the Assessing Officer suggesting that the cash withdrawals were used for some other undisclosed purposes, the benefit of earlier withdrawals cannot be denied merely due to the time gap between withdrawal and redeposit. The assessee submitted before the ld. CIT(A) that mere existence of a time lag, in the absence of incriminating material, cannot by itself justify an addition u/s.69 of the Act. In view of these submissions, the assessee contended before the ld. CIT(A) that the addition of Rs.15,10,500/- made by the Assessing Officer u/s. 69 of the Act is unwarranted and deserves to be deleted. 9. On perusal of the submission and various judicial precedents relied by the assessee, the ld. CIT(A) passed an order dated 22.01.2025 by sustaining the addition of Rs.15,10,500/- made by the Assessing Officer u/s.69 of the Act, by holding as under: “5.5 Thus appellant has broadly maintained the same position as he was maintaining during the course of assessment proceedings. The appellant is stating that the cash deposit during demonetization is out of cash withdrawal which he had made previously. However the assessing officer is correct in questioning the fact that why the person who is not having any income and is completely dependent on interest income will keep a substantial amount of money at home. Furthermore, the appellant is not clearly mentioning why he was continuously withdrawing and depositing money. The last major withdrawal was of Rs. 4 Lakh which was done on 29th May, 2016. The deposit of Rs. 5 Lakh was done one 11th November 2016. Thus, there is a gap of almost 5 and half months between withdrawal and deposit. Furthermore, as per the submission of the appellant he is depositing as well as withdrawing cash on same days. The above affairs which come out from the submission of the appellant can be tabulated as follows: :-7-: ITA. No:609/Chny/2025 S. No Date of deposit Amount of cash deposited (Rs.) Amount of cash withdrawn (Rs.) 1 11.11.2016 5,00,000 10,000 2 14.11.2016 5,00,000 10,000 3 22.11.2016 1,20,000 10,000 4 28.11.2016 1,50,000 24,000 5 05.12.2016 75,000 14,000 6 16.12.2016 75,000 8,000 7 20.12.2016 90,500 8,000 Total 15,10,500 5.6 Thus on the one hand the appellant is submitting that he was not having any business and the cash was deposited out of his previous withdrawals and on the other hand he is withdrawing as well as depositing cash on the same day. The fact also needs to be taken into consideration that the above period is the period of demonetization when there was heavy rush and long queues in every bank for deposit as well as withdrawal. The appellant has also not made clear that if Rs. 15 Lakh was withdrawn earlier and the same was opening cash in hand on 11th November 2016 then why the complete cash was not deposited at one go and the deposit was made in 7 parts from 11th November to 20th December over one month’s time. Thus the arguments taken by the appellant are not maintainable. The following case laws can be looked at on the issue.” 10. Aggrieved by the order of the ld. CIT(A), the assessee preferred an appeal before us. 11. The ld. AR of the assessee, Shri R. Venkata Raman, Chartered Accountant, submitted that it is an undisputed fact that the assessee had made cash withdrawals from his bank account. Referring to the orders of the lower authorities, the ld. AR contended that the only ground for making the addition was the time gap between the cash withdrawals and their subsequent re-deposit. The ld. AR submitted that the assessee, being a senior citizen and not well-versed in online banking or digital transactions, relied on cash withdrawals to manage his expenses. The ld. AR further submitted that, apart from routine monthly maintenance needs, the assessee had also withdrawn cash to meet anticipated marriage expenses. To verify the purpose of these withdrawals, the Assessing Officer had called for supporting bills and documents, which the assessee duly submitted during the assessment proceedings. :-8-: ITA. No:609/Chny/2025 The ld. AR pointed out that even after examining these bills, the Assessing Officer did not raise any objection to the explanation provided. Therefore, the ld. AR argued that once the intended use of the cash withdrawals has been established and not disputed, there remains no valid reason to disallow the benefit of considering the earlier cash withdrawals against the subsequent re-deposit. 12. The ld. AR, referring to the assessee’s bank account statement held with Karur Vysya Bank, Velachery Branch, Chennai (Account No. 1265175000000145), placed at pages 1 to 3 of the Paper Book, submitted that the assessee had deposited cash amounting to Rs.15,10,500/- during the period from 11.11.2016 to 20.12.2016. Drawing our attention to the cash flow statement for the period from 01.04.2015 to 31.12.2016, available at pages 4 to 6 of the Paper Book, the ld.AR submitted that the cash withdrawals from the said bank account constituted inflows which were utilized to meet various personal and household expenses. The unspent portion of these withdrawals was subsequently re-deposited during the demonetization period. 13. Further, referring to the cash book extracts for the period 11.11.2016 to 20.12.2016, placed at pages 7 to 13 of the Paper Book, the ld.AR submitted that the assessee had sufficient cash balance on hand prior to each deposit. It was therefore contended that the cash deposits were not unexplained or without adequate source, but rather constituted re-deposits of earlier cash withdrawals. In light of this, the ld. AR argued that the assessee had satisfactorily demonstrated the source of the cash deposits amounting to Rs.15,10,500/- and, accordingly, the addition made by the Assessing Officer u/s. 69 of the Act and sustained by the learned CIT(A) is unjustified and liable to be deleted. :-9-: ITA. No:609/Chny/2025 14. Referring to the income tax returns filed by the assessee for the AYs 2015-16 to 2017-18, placed at pages 14 to 24 of the Paper Book, the ld. AR submitted that the assessee had declared total income of Rs.9,64,490/- for AY 2015-16, Rs.10,89,430/- for AY 2016-17, and Rs.9,94,670/- for AY 2017-18. The ld. AR pointed out that the aggregate income declared over these three years amounted to Rs.30,48,590/-, comprising solely of interest income, which had been duly credited to the assessee’s bank account. It was further submitted that the cash withdrawn by the assessee from the bank account represented this interest income, which had already been subjected to tax. Therefore, the ld. AR contended that the re-deposit of such funds during the demonetization period cannot be treated as unexplained income. According to the ld. AR, the Assessing Officer’s action in taxing the re-deposited amount effectively results in double taxation of income that has already been assessed, which is unjustified and contrary to law. 15. The ld. AR, referring to page 22 of the order passed by the ld. CIT(A), submitted that the ld. CIT(A) had observed that the assessee was withdrawing and depositing cash on the same day. In response, the ld. AR clarified that the withdrawals referred to by the ld. CIT(A) were only small amounts in new currency, made during the demonetization period. Therefore, the ld. AR contended that such an observation is misplaced and has no relevance to the core issue. It was argued that these minor withdrawals do not justify the addition made by the Assessing Officer, and the reliance placed on them by the ld. CIT(A) in sustaining the addition is unwarranted. 16. The ld. AR, placing reliance on the judgments of the Hon’ble Karnataka High Court in S.R. Venkata Ratnam v. CIT [1981] 127 ITR 807 (Kar) and in :-10-: ITA. No:609/Chny/2025 Smt.P.Padmavathi v. ITO (ITA No. 414/2009, dated 06.10.2020), submitted that once the assessee has satisfactorily established the source of the cash deposit as being from prior withdrawals from a disclosed bank account, such explanation cannot be disregarded in the absence of any material evidence to the contrary. The ld. AR argued that it is not within the purview of the Department to question how the assessee dealt with the withdrawn funds in the intervening period before redeposit, unless there is a clear finding that the explanation offered is implausible or contradicted by facts on record. 17. The ld. AR, further relying on the judgment of the Hon’ble Kerala High Court in CIT v. K. Sreedharan [1993] 201 ITR 1010 (Ker), submitted that the Hon’ble High Court had held that even a time gap of four years between the source and its subsequent deposit does not, by itself, negate the presumption of continued availability of the funds. In the present case, the ld. AR pointed out that the time gap between the assessee’s cash withdrawals and subsequent re-deposits ranges only from 6 to 18 months, which is well within the four-year period accepted by the Hon’ble High Court. Therefore, it was argued that the time gap alone cannot form a valid basis to reject the assessee’s explanation regarding the source of cash deposits. 18. The ld. AR, relying on the judgment of the Hon’ble Delhi High Court in Jaya Aggarwal v. ITO [2018] 92 taxmann.com 108 (Del), submitted that the assessee’s explanation regarding the re-deposit of previously withdrawn cash ought to be accepted in the absence of any contrary evidence or adverse findings brought on record by the Department. :-11-: ITA. No:609/Chny/2025 19. The ld. AR further placed reliance on the following decisions of the coordinate benches of this Tribunal and contended that the mere existence of a time gap between cash withdrawals and their subsequent re-deposit cannot, by itself, be a valid ground to reject the assessee’s explanation particularly in the absence of any specific finding that the withdrawn cash was utilized for some other purpose: i. Smt. Krishna Agarwal v. ITO (ITA No.53 / JODH / 2021) – Jodhpur Tribunal ii. Sudhirbhai Pravinkant Thaker v. ITO [2017] 88 taxmamnn.com 382 (Ahmedabad Tribunal) 20. Based on the foregoing submissions, the ld. AR prayed for the deletion of the addition of Rs.15,10,500/- made by the AO u/s. 69 of the Act, by setting aside the order passed by the ld. CIT(A) and allowing the appeal of the assessee. 21. Per contra, the ld. DR placed reliance on the orders of the Assessing Officer and the ld. CIT(A), and submitted that no prudent individual would retain substantial cash in hand over an extended period, thereby foregoing potential interest income. Accordingly, the ld. DR urged that the order of the ld. CIT(A) be upheld and the addition sustained. 22. We have heard both the parties, perused materials available on record and gone through orders of the authorities below along with judicial precedents relied on. It is an admitted fact that the assessee is regular in filing his return of income and had filed the return of income by declaring total income of Rs.9,64,490/- for AY 2015- 16, Rs.10,89,430/- for AY 2016-17, and Rs.9,94,670/- for AY 2017-18. Further, it is undisputed fact that the assessee had withdrawn cash aggregating to Rs.42,50,000/- from his bank account from 10.05.2015 to 29.05.2016. In support of the cash deposit made, the assessee had furnished a comprehensive cash flow statement, a :-12-: ITA. No:609/Chny/2025 summary of cash inflows and outflows, bank statement and extracts from the cash book both before the AO as well as the ld.CIT(A). These documents collectively demonstrate that the cash deposits of Rs.15,10,500/- made into the assessee’s bank account during the demonetization period were sourced from earlier cash withdrawals from the same bank account. We note that it is evident that the assessee has duly discharged the initial burden of proof by establishing the source of the cash deposits as unutilized cash withdrawals. It is a settled position in law that while an assessee is required to prove a positive fact, he cannot be expected to prove a negative. In such circumstances, the onus shifts to the Assessing Officer to rebut the explanation by bringing on record any material evidence to show that the withdrawn cash was utilized or diverted for some other purpose. 23. In the present case, the Assessing Officer has not brought on record any such material to suggest that the cash withdrawn earlier was spent, invested, or otherwise deployed elsewhere. We note that the only basis for the AO’s rejection of the assessee’s explanation is the time gap between the withdrawal and the subsequent re-deposit of cash. However, it is to be noted that there is no statutory or judicially prescribed time limit within which cash must be re-deposited to be considered explained. The mere existence of a time gap, without any corroborative evidence of alternate use of funds, cannot be a valid ground to disbelieve the assessee’s explanation. Furthermore, there is no legal bar on an assessee retaining cash in hand for a reasonable period, particularly when the source of such cash is accounted for and traceable through bank withdrawals. The AO’s inference that no prudent person would hold cash and forego interest is speculative and not based on any evidence specific to the assessee's financial conduct or circumstances. :-13-: ITA. No:609/Chny/2025 24. It is also an undisputed fact that the assessee’s sole source of income is interest, as accepted by the AO. There is no allegation or finding on record to suggest that the assessee has any other source of income. Therefore, in the absence of any contrary evidence or material brought on record by the AO, the cash deposits made in the bank account cannot be presumed to represent income from an undisclosed source. The AO’s primary concern appears to be that a prudent person would not keep substantial cash in hand, thereby foregoing interest income, and has presumed that the cash withdrawn must have been utilized for some other purpose. However, such a presumption is merely based on conjecture and not supported by any material evidence on record. It is not for the AO to decide that the assessee should have acted in a financially prudent manner, which expectation is unreasonable and cannot form a valid basis for drawing an adverse inference. The AO has neither demonstrated nor established that the cash withdrawals were in fact utilized or diverted elsewhere. Mere assumptions regarding the utilization of cash without concrete evidence cannot justify an addition u/s. 69 of the Act. It is a well- settled principle that additions cannot be made based on suspicion or surmise. Therefore, in our considered view, in the absence of any positive finding or evidence to contradict the assessee’s explanation, the presumption that the cash deposits are unexplained is not sustainable. 25. The Hon’ble Karnataka High Court in S.R. Venkata Ratnam v. CIT [1981] 127 ITR 807 (Kar) has held as under: “….once the petitioner-assessee disclosed the source as having come from the withdrawal made on a given date from a given bank, it was not for respondents Nos. 1 and 2 to concern themselves with what the assessee did with that money, i.e., whether he had kept the same in his house or utilised the services of a bank by depositing the same. The ITO had only two choices before him. One was to reject the explanation as not believable for the reason that on his investigation no such :-14-: ITA. No:609/Chny/2025 pigmy deposit was ever made in the bank. In the alternative he ought to have called upon the assessee-petitioner to substantiate his claim by documentary evidence. Having exercised neither of the choices, it was not open to the ITO to merely surmise that it would not be probable for the assessee to keep Rs. 15,000 unutilised for a period of two years. The ITO should have given an opportunity to the assessee to substantiate his assertion as to the source of his capital outlay.” 26. Following the above judgment, the Hon’ble Karnataka High Court in Smt. P. Padmavathi v. ITO (ITA No. 414/2009, dated 06.10.2020), has held as under: “12. In this case, it is not in dispute that the assessee withdrew a sum of ₹.5,00,000/- on 18.8.2003 and ₹.2,00,000/- on 20.8.2003 from her savings account. She is an agriculturist and she had agricultural income. Once she demonstrated that she was in possession of ₹.7,00,000/- cash plus agricultural income on her hands, if after 40 days, a cash deposit is made to the extent of about ₹.5,20,000/- towards loan account, it cannot be said that the source of the said deposit is not properly explained. Merely because there is a delay of 40 days from the date of withdrawal of the money from the bank account to the date of deposit in the loan account. Once money is shown to be in the account and withdrawn, what the assessee did with that money till it was actually deposited, is not the concern of the Department. As long as the source is explained and established and when the money is withdrawn from a savings bank account and paid to discharge loan by deposit into a loan account, it is not possible to hold that the source is not explained. In that interregnum period, if the very same money is utilised for other purpose and thereafter, it is appropriated towards discharge of a loan, that cannot be held against the assessee. In that view of the matter, the finding recorded by the Tribunal is erroneous and requires to be set aside. Therefore, the said substantial question of law is also held against the revenue and in favour of the assessee.” 27. The Hon’ble Delhi High Court in Jaya Aggarwal v. ITO [2018] 92 taxmann.com 108 (Del) has held as under: “8. We find it difficult to accept the approach and findings recorded for several reasons. The brief order does not examine and consider the entire explanation and material on record as withdrawal of Rs.2,00,000/- in cash was undisputed. Naturally, the huge withdrawal was for a purpose and objective. From the beginning the explanation given was that withdrawal was to pay earnest money for purchase of immovable property, which deal did not fructify. Explanation given was not fanciful and sham story. It was perfectly plausible and should be accepted, unless there was justification and ground to hold to the contrary. Delay of some months in redeposit of part amount is the sole and only reason to disbelieve the appellant. Persons can behave differently even when placed in similar situations. Due regard and latitude to human conduct and behaviour has to be given and accepted when we consider validity and truthfulness of an explanation. One should not consider and reject an explanation as concocted and contrived by applying prudent man's behaviour test. Principle of preponderance of probability as a test is to be applied and is sufficient to discharge onus. Probability means likelihood of anything to be true. Probability refers to appearance of truth or likelihood of being realised which any statement or event bears in light of the present evidence (Murray's English Dictionary). Evidence :-15-: ITA. No:609/Chny/2025 can be oral and cannot be discarded on this ground. Assessment order and the appellate orders fall foul and have disregarded the preponderance of probability test.” 28. Therefore, in the present facts and circumstances of the case and the ratio decidendi laid down in the aforementioned judgments is directly applicable to the facts and circumstances of the present case concerning the assessee and hence we are inclined to set aside the order of the ld.CIT(A). Accordingly, by respectfully following the binding precedent, we hold that the addition of Rs.15,10,500/- made u/s.69 of the Act in the hands of the assessee, is not justified in law. Consequently, the said addition stands deleted. 29. In the result, the appeal filed by the assessee is allowed. Order pronounced in the court on 27th June, 2025 at Chennai. Sd/- Sd/- (जॉजŊ जॉजŊ क े) (GEORGE GEORGE K) उपाȯƗ /VICE PRESIDENT (एस. आर. रघुनाथा) (S. R. RAGHUNATHA) लेखा सद˟/ACCOUNTANT MEMBER चेɄई/Chennai, िदनांक/Dated, the 27th June, 2025 SP आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3.आयकर आयुƅ/CIT– Chennai/Coimbatore/Madurai/Salem 4. िवभागीय Ůितिनिध/DR 5. गाडŊ फाईल/GF "