The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) deleted Rs 31.40 lakh addition under Section 69A after finding that the source of cash deposits had been supported by bank records showing gifts received from the taxpayer’s parents, cash withdrawals and subsequent deposits into a post office savings account.
Sunil Kumar Garg (assessee) had deposited a total of Rs 31.40 lakh in a post office savings account held jointly with his wife Vandana Garg. The assessee explained that the money mainly came from gifts received from his father and mother.
He produced bank statements of his parents showing the amounts given to him. He also produced his own bank account showing receipt of the money and later cash withdrawals.
The assessee also relied on closure proceeds of four term deposits totalling about Rs 9.03 lakh, from which Rs 4.50 lakh was withdrawn in cash. He also explained that Rs 30,000 came from past cash savings.
The post office account was produced to show that the withdrawn cash was subsequently deposited there.
The assessee’s counsel argued that the entire flow of money had been supported by documentary evidence. They pointed out that the Assessing Officer had rejected the explanation mainly because it appeared unreasonable to withdraw cash from one account and deposit it into another when the amount could have been transferred directly through banking channels.
The revenue counsel relied on the findings of the AO and the CIT(A).
The single-member bench comprising Annapurna Gupta (Accountant Member) observed that the assessee had shown the receipt of gifts through banking channels, withdrawal of the same amounts in cash and their subsequent deposit into the post office account.
The tribunal observed “The facts pointed out by the Ld. Counsel for the assessee explaining the entire trail of money received by the assessee from his parents to one of his bank accounts from which he withdrew cash and deposited in his post office savings bank account has not been disputed by the Revenue.”
It further observed “I do not find any merit in the order of the Authorities below rejecting assessee’s explanation on the mere ground of unreasonableness.” The tribunal also observed that the Revenue had not claimed that the withdrawn cash had been used somewhere else. It deleted the Rs. 31.40 lakh addition and the assessee’s appeal was allowed.
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Sunil Kumar Garg vs ITO
CITATION : 2026 TAXSCAN (ITAT) 1359Case Number : ITA No.1807/JPR/2025Date of Judgement : 15.09.2026Coram : ANNAPURNA GUPTA, ACCOUNTANT MEMBERCounsel of Appellant : Sh. Dheeraj Borad, CACounsel Of Respondent : Mrs. Arti Rawat, JCIT
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