Benefit of cash deposit up to 2.50 lacs for demonetisation period not available separately for household earnings of non taxpayer wife
ABCAUS Case Law Citation:
ABCAUS 3784 (2023) (07) ITAT
In the instant case, the appeal was preferred by the assessee against the order passed by the passed by the National Faceless Appeal Centre (NFAC) in confirming various additions made by the Assessing Officer (AO) being cash deposited in bank account during demonetization period.
The appellant assessee was a Government Servant. This case was selected for limited scrutiny through CASS to examine “large value cash deposits in the bank account during demonetization period as compared to returned income.
In response to the query raised by the Assessing Officer, it was submitted by the assessee that source of the cash deposited deposited was agricultural income through sale of poplar trees, cash in hand from past savings, savings and gullak of children received by them as gifts from relatives on their birthdays etc.
However, the explanation of the assessee did not find favour with the Assessing Officer and after giving benefit of savings of children made addition of the rest of the amount by treating the same as income from undisclosed sources. The provisions of Section 115BBE of the Income Tax Act, 1961 were also invoked.
The Tribunal observed that as far as the issue of agricultural income was concerned, the assessee had submitted copies of four invoices pertaining to sale of poplar trees and also produced the copy of Kisan Bahi before the Assessing Officer as well as the NFAC. However, apparently, these invoices were not considered by the Assessing Officer. The Assessing Officer has not discussed these invoices in the body of his order and has simply stated that no evidence was forthcoming from the side of the assessee vis-à-vis agricultural income.
The Tribunal opined that without any adverse material being brought on record, the claim of the assessee cannot be simply discarded. Accordingly, the ITAT set aside the order of the NFAC on the issue.
With regard to income from the past savings, it was submitted that assessee being in
Government Service is usually posted at different districts out of his own home town and, therefore, he was in the habit of giving cash to his wife to meet household expenses from time to time as well as to keep cash at home to meet contingencies and emergencies. It was submitted that only this accumulated cash from the past savings over a period of several years had been deposited and the same should be accepted.
Placing reliance on CBDT Instruction No. 3/2017 dated 21.02.2017 it was contented by the assessee that in case of an individual (other than minors) not having any business income, no further verification is required to be made if total cash deposit is up to Rs 2.5 lakh.
It was submitted that as per the said instruction, amount up to Rs. 5 lacs pertaining to past savings should be accepted without any further explanation for the reason that these savings pertain to the savings of the assessee as well as his wife and Rs. 2.50 lacs is to be taken as limit for one person, and for two persons, Rs. 5 lakhs should be accepted.
However, the ITAT rejected the above contention that benefit of Rs.2.5 lacs should be given in the case of his wife also.
The Tribunal observed that admittedly and undisputedly, assessee’s wife was not a tax payer and, therefore, whatever cash was accumulated out of past savings was out of the earnings of the assessee (her husband) only and, therefore, only the husband i.e. the assessee should get the benefit of the said CBDT instruction.
Accordingly, the Tribunal directed the Assessing Officer to given benefit of cash deposits of Rs.2.50 lacs out of total cash deposits on this account.
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