The Banglore Bench of the Income Tax Appellate Tribunal (ITAT) consisting of B.R. Baskaran (Accountant Member) deleted the addition of cash deposits during the demonetisation period on the ground that the retired army officer had withdrawn the cash to meet medical emergencies.
The assessee is a retired army officer and is drawing a pension. During the demonetisation period, the assessee deposited a sum of Rs. 7,01,000 in aggregate in two bank accounts. Asked about the sources, the assessee submitted that he had withdrawn cash on 05.06.2015 to the tune of Rs. 8,00,000/-from ICICI Bank and had kept the cash with him.
The assessee submitted that he had kept the money in hand in order to meet emergency medical treatment, as he was suffering from heart disease. The AO took the view that the assessee, being an army officer, was provided with free treatment facilities and hence the claim of keeping cash at home was not acceptable.
The AO has noticed that the assessee has made cash deposits to his bank account. The AO assessed the amount of Rs. 7,01,000 as unexplained cash under Section 69A of the Income Tax Act, 1961, which was confirmed by the CIT (A).
The ITAT noted that the assessee had withdrawn cash in small amounts in subsequent periods also. Since the assessee is an aged person and retired from the 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 The assessee is a pensioner and there is no other material to show that the cash of Rs. 8,00,000 withdrawn earlier had been spent away.
The tribunal ruled that the sources of deposits must be explained. The tribunal set aside the order passed by the CIT (A) and directed the AO to delete the addition of Rs. 7,01,000.
Case Title: Col. Ranjan Sharma Versus ITO
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