IN THE INCOME TAX APPELLATE TRIBUNAL SMC-‘A’ BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA No. 277/Bang/2024 Assessment Year : 2017-18

ORDER

PER BEENA PILLAI, JUDICIAL MEMBER This appeal at the instance of the assessee is directed against the CIT(A) order vide DIN & Order No.: ITBA/NFAC/S/250/2023- 24/1060087222(1) dated 24.01.2024. The assessee has raised the following grounds of appeal:

“1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case..

2. The appellant denies himself liable to be assessed on a total income of Rs. 18,56,029/- as against the returned income of Rs. 5,17,030/- under the facts and in the circumstances of the appellant's case.

3. The learned CIT[A] is not justified in upholding the addition of Rs.11,79,000/- as unexplained money u/s.69A of the Act, in respect of the cash deposits made in the bank accounts of the appellant during the period of demonetization under the facts and in the circumstances of the appellant's case.

3.1 The learned CIT[A] failed to appreciate that the deposits made by the appellant in the bank account were from out of the opening cash balance and anterior withdrawals from bank and therefore, the same could not be regarded as unexplained money liable for tax u/s. 69A of the Act, under the facts and in the circumstances of the appellant's case.

4. The learned CIT[A] is not justified in upholding the taxation of the alleged unexplained money in terms of the provisions of section 115BBE at the rate of 60% under the facts and in the circumstances of the appellant's case.

5. Without prejudice to the right to seek waiver with the Honble CCIT/DG. the appellant denies himself liable to be charged to interest u/s. 234-A and 234-B of the Act, which under the facts and in the circumstances of the appellant's case and the same deserves to be cancelled.

6. For the above and other grounds that may be urged at the time of hearing of the appeal. your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs.”

2. Brief facts of the case are as under:

2.1 Shri Sudarshan Purushothama is a partner in the firm M/s. SRK OFFICE-X and was getting interest on capital and remuneration from the said partnership firm and not having any other business of his own filed his return of income for the A.Y. 2017-18 on 29.01.2018 declaring a total income of Rs. 5,17,030/-.

2.2 The case was selected for limited scrutiny under CASS for the reason cash deposit during demonetisation period. During the course of assessment proceeding, the assessee was asked to produce nature of business, statement of income, financial statements, copy of bank account statement, cash book and details of cash deposit from 01.04.2016 to 31.03.2017 with sources and cash deposited during demonetisation period. The assessee produced the cash book and claimed that the cash was deposit to bank account during the period 01.04.2016 to 31.03.2017 is Rs.11,79,000/- and the source for this deposit are withdrawal from the bank which were redeposited into the bank.

2.3 The Ld. Assessing Officer made addition of entire cash deposit of Rs.11,79,000/- made during the demonetisation period as unexplained money u/s. 69A of the IT Act even though the same is shown in the cash book summary drawn showing the flow of transaction.

Aggrieved by the order of the Ld.AO, the assessee filed appeal before the Ld.CIT(A). Before the Ld.CIT(A), the assessee furnished the full details relating to the cash flow at the time of assessment. However, the Ld.CIT(A) uphe