Housewives savings deposited in bank A/c up to 2.5 lakh in demonetization cannot be consider income

Housewives savings deposited in bank A/c up to Rs. 2.5 lakh in demonetization cannot be income: ITAT Agra

Brief Summary of the Case: During the demonetization phase, the assessee, a housewife, deposited cash in her bank account totalling Rs. 2,11,500/-.

She was asked to explain the source of the deposit during the vetting process. She stated that she does not have any commercial operations and that her main source of income is interest from her savings.

The amount placed in the bank, however, was treated as unexplained money by the Assessing Officer (AO) under section 69A read with 115BBE of the Income-tax Act, 1961.

The assessee filed an appeal before the Commissioner appeal (NFAC) but failed to succeed

The Agra Tribunal has held that assessing officers do not have the authority to tax cash deposits in bank accounts made during the Demonetization Scheme, 2016, if they are less than 2.5 lakh, as per Instruction No. 03/2017 dated 21-02-2017, which are statutory and obligatory on the revenue.

Women were left with little choice except to deposit their money in banks after demonetization.

As a result, when the assessee explained to the AO that the money deposited in the bank during demonetization was her money saved over many years and was kept for herself and her family in case of an emergency, it could be concluded that the assessee had properly explained the source of deposit as required by Section 69A.

As a result, the sum deposited by the assessee during the demonetisation could not be considered income.

The Agra Tribunal further ruled that this decision might be used as precedent in cases involving cash deposits made by housewives during the demonetisation, up to a maximum of Rs 2.5 lakhs.

We would like to clarify that this decision can be used as precedent in proceedings arising from cash deposits made by housewives during the demonetisation programme of 2016, but only up to a ceiling of Rs 2.5 lakhs. so we can say that Housewives who deposited less than Rs. 2.50 lakhs in cash during demonetization are exempt from paying income tax: ITAT Agra

Disclaimer: The content of this post isn't considered to be professional or legal advice, We aren't responsible for any damages arising from your access to the location content & must not be relied on or used as a substitute for legal advice from a lawyer professional in your jurisdiction. CARajput is among India's big digital compliance services platform which committed to helping people have started & developed their businesses. We had started with the goal of creating it easier for start-ups to start out their business. Our main aim is to assist the businessman with applicable laws & regulations compliance and providing support at each & every level to make sure the business stays compliant and growing continuously. For any query, help or feedback you may in touch on singh@carajput.com or Call or what’s-up on 9-555-555-480