An important decision has come out for those who deposited cash in banks during demonetization. The matter is about depositing Rs 15 lakh in the bank account. In this case ITAT has given its decision in favor of the account holder.
An important decision has come out for those who deposited cash in banks during demonetization. The Income Tax Appellate Tribunal (ITAT) has said that tax cannot be imposed merely on the ground that ‘some person would not want it’. This case pertains to ITO vs. Smt. Purnima Das, in which the woman withdrew Rs 15 lakh from the bank and later deposited it in the bank during bankruptcy. After this the Chemistry Department kept this condition doubtful.
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What is the whole matter?
According to Trust Express, the taxpayer woman had withdrawn a total of Rs 15 lakh from her bank from time to time, long before the year 2016. When demonetization happened in 2016, the woman deposited the old back cash in the bank. The tax department declared this cash deposited by investors and the Assessing Officer (AO) as undisclosed income.
argument vs evidence
The taxpayer i.e. the woman said that there was no new earning from this, rather her cash was earlier withdrawn from the bank, which was kept in her house. Complete details of the retailers were available in the bank records. The tax officer (AO) said that no person can keep such huge cash lying idle in the house for long. He will either invest it, spend it or earn interest. Therefore this story is not reliable. Based on this logic, the officer considered the deposited notes as undisclosed income.
ITAT took the final decision
The Tribunal considered this argument of the tax officer to be completely wrong and ruled in favor of the taxpayer. Highlights of the court:
- It was clear from the bank sign up that the money had been released earlier. The department had no evidence to prove that he had spent the money elsewhere.
- The court said that anything can be unimaginable or strange, but unless there is concrete evidence to prove it wrong, it cannot be the basis of tax.
- The principle of justice is that doubt, no matter how deep, cannot take the place of proof.
3 big lessons for taxpayers
This judgment has made it clear to those people who deposit their own savings in the bank after keeping them at home:
- Keep the receipts of withdrawal of money from the bank and store it permanently.
- Keep a proposal of your income and expenses so that the details of the coins can be stated.
- If you have income tax valid standard, you cannot make payment based only on the department’s perception.
Note: This is the decision of ITAT. The Agriculture Department can challenge it in the High Court or the Supreme Court. Therefore, the legal status may also change in the future.