RAJASEKARAN JOTHI,CHENNAI V. ITO, NCW-19(1), CHENNAI

ITA 174/CHNY/2025

AI Insights

The case revolves around an appeal by Rajasekaran Jothi against the order of the Learned Commissioner of Income Tax (NFAC), Delhi, which upheld the addition of Rs. 10,35,000 to the assessee's income for the Assessment Year 2017-18. The addition was initially made by the Assessing Officer under section 143(3) of the Income-tax Act, 1961, on the grounds that the cash deposits made by the assessee during the demonetization period could not be substantiated. The assessee, a government employee, claimed that the deposits were from savings of his salary received in cash until 2013 and subsequent withdrawals from the bank. The Tribunal, after reviewing the submissions and evidence, concluded that the assessee had adequately substantiated the source of the deposits and thus allowed the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 107236 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R. ANITHA
• Assessee Lawyers: Y. SRIDHAR
• Section: 143(3); 69A

Judgement Text

"आयकर अपीलीय अिधकरण, ‘सी’ \u0011ा यपीठ, चे\u0016ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH: CHENNAI \u0019ी एबी टी. वक , \u0011ा ियक सद! एवं \u0019ी जगदीश, लेखा सद! क े सम( BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No174/Chny/2025 िनधा:रण वष: /Assessment Year: 2017-18 Rajasekaran Jothi, No.185/4, Kurunji Colony, Tirumangalam, Anna Nagar, Chennai – 600 040. Vs. The Income Tax Officer, Non Corporate Ward-19(1), Chennai. [PAN: AFMPJ 1842G] (अपीलाथ\u0007/Appellant) (\b यथ\u0007/Respondent) अपीलाथ की ओर से/ Appellant by : Shri Y. Sridhar, FCA HIथ की ओर से /Respondent by : Ms. R. Anitha, Addl. CIT सुनवाई की तारीख/Date of Hearing : 18.03.2025 घोषणा की तारीख /Date of Pronouncement : 15.04.2025 आदेश / O R D E R PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2019-18 arises out of the order of Learned Commissioner of Income Tax (NFAC), Delhi [hereinafter “CIT(A)”] dated 20.11.2024 in the matter of assessment framed by the Assessing Officer [AO] u/s. 143(3) of the Income-tax Act,1961 (hereinafter “the Act”) on 18.12.2019. ITA No.174/Chny/2025 :- 2 -: 2. The assessee is an individual and employed with Government of India. The assessee has filed his return of income of Rs. 8,28,940/- on 04.08.2017.During demonetization period, the assessee has deposited cash of Rs.10,35,000/- and explained the source of cash deposit as savings from his salary, which he claimed to have received in cash up to the year 2013 and subsequent withdrawal from bank. However, the A.O did not accept assessee’s explanation and made addition of Rs.10,35,000/- u/s. 69A of the Act. Aggrieved, the assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A), however, upheld the addition made by the A.O. 3. The Ld. Authorized Representative (A.R) of the assessee has submitted that the assessee, being a Government employee, had been receiving his salary in cash until 2013 and subsequently through bank and cash deposited was out of the past savings and withdrawals from his bank account. 4. On the other hand, the Ld. Departmental Representative (DR), has relied on the orders of lower authorities. 5. We have heard the rival submissions, and perused the materials available on record, including the bank statement and salary slips submitted by the Ld. A.R. The A.O has rejected the assessee’s ITA No.174/Chny/2025 :- 3 -: explanation that the cash deposited represented his salary savings as assessee has deposited cash during demonetization period on multiple dates, and assessee had a history of depositing cash in bank. The A.O, based on the presumptions regarding human behavior, did not accept the assessee’s explanation and made addition of Rs.10,35,000/-. We do not agree with the A.O that assessee cannot keep cash for 5 to 6 years and cannot deposit cash in multiple occasions during demonetization. We find that the assessee has substantiated his claim with supporting documents, including bank statements and pay slips, indicating that he has sufficient funds to make such deposits. Therefore, the explanation offered by the assessee cannot be rejected solely based on the assumptions. In light of the above, we find no reason to doubt in the assessee’s explanation, and accordingly, the addition made by the A.O is deleted. Hence, the appeal filed by the assessee is allowed. 6. In the result, the appeal filed by the assessee is allowed. Order pronounced on 15th March, 2025. Sd/- Sd/- (एबी टी. वक ) (ABY. T. Varkey) \u0011ाियक सद! / Judicial Member (जगदीश) (Jagadish) लेखा सद! /Accountant Member चे\u0010नई/Chennai, \u0013दनांक/Dated: 15th March, 2025. EDN/- ITA No.174/Chny/2025 :- 4 -: आदेश क\u0016 \bितिल\u0019प अ\u001aे\u0019षत/Copy to: 1. अपीलाथ\b/Appellant 2. थ\b/Respondent 3. आयकर आयु\u0010/CIT, Chennai 4. िवभागीय ितिनिध/DR 5. गाड\u0019 फाईल/GF "