ABHAY BENARA,AGRA V. INCOME TAX OFFICER, AGRA

ITA 539/AGR/2025

AI Insights

The case revolves around an appeal by Sh. Abhay Benara against the order of the Commissioner of Income-tax (Appeals), Kanpur-04, which confirmed the addition of Rs. 3,50,000 as unexplained cash to the assessee's income for the Assessment Year 2010-11. The primary contention was regarding the source of cash deposits made by the assessee in his bank accounts, which the Assessing Officer initially treated as undisclosed income. The Tribunal examined the cash flow statements and other submissions, ultimately concluding that the cash deposits were legitimate and derived from the assessee's withdrawals and subsequent lending activities.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 838623 (ITAT-AGRA)
• Duration Of Justice: 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 21-11-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL KUMAR
• Assessee Lawyers: ASHISH JAISWAL
• Section: 142(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA (SMC) BENCH, AGRA BEFORE : SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA No. 539/Agr/2025 Assessment Year: 2010-11 Sh. Abhay Benara 1/205, Professor Colony, Hari Parvat, Agra Vs. Income Tax Officer, Ward 1(1)(1), Agra PAN : ADLPB2007Q (Appellant) (Respondent) Assessee by Shri Ashish Jaiswal, Adv. Department by Shri Anil Kumar, Sr. DR Date of hearing 19.02.2026 Date of pronouncement 20.02.2026 ORDER The assessee has filed this appeal against the order of the learned Commissioner of Income-tax (Appeals), Kanpur-04 dated 04.09.2025 for the Assessment Year 2010-11. 2. Brief facts of the case are assessee filed his return of income for the A.Y 2010-11 on 03.08.2010 declaring total income of Rs. 570420/-. The total income declared are from salary, house property and from other sources. The interest income consist of income from bank and income from money lending. The case was selected for scrutiny through CASS. Subsequently, notices u/s 143(2) and 142(1) of the Act were issued and served on the assessee. In response, AR of the assessee attended the Printed from counselvise.com ITA No.539/Agr/2025 2 | P a g e proceedings from time to time and submitted the relevant information as called for. 3. During the assessment proceeding, the Assessing Officer observed that the assessee made cash deposits in State Bank of India and ICICI Bank and frequent intervals. The assessee was asked to explain source of the same. In response the assessee submitted that the source of cash deposit is out of cash withdrawals from bank from time to time. Since the assessee lends the same to others and read opposite the same. The Assessing Officer observed from the cash flow statement submitted by the assessee, It has declared opening cash balance of Rs. 3,50,000/- when the assessee was asked to substantiate the same, it was submitted that assessee maintained cash balance of about 3,00,000/- on each day. Not convinced with the above submission the Assessing Officer sustained above said cash as unexplained cash to the total income of assessee. 4. Aggrieved with the above order, the assessee preferred an appeal before ld. CIT(A)-Kanpur-4. The assessee filed a detailed submissions including cash flow statement from 21.10.2005 to 31.03.2010 demonstrating the opening and closing balances of the end of each year. After considering the above, ld. CIT(A) called for the remand report from Printed from counselvise.com ITA No.539/Agr/2025 3 | P a g e the Assessing Officer and the same is reproduced at page 10 & 11 of the impugned order. The rejoinder to the remand report submitted by the assessee is reproduced at page 12 to 15 of the impugned order, after considering the same, ld. CIT(A) sustained the addition made by the Assessing officer. 5. Aggrieved, the assessee is in appeal before ITAT, raising following grounds: 1 THAT THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 3,50,000.00 MADE BY THE LEARNED ASSESSING OFFICER ON ACCOUNT OF OPENING CASH IN HAND AS UNEXPLAINED CASH. 2 THAT THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER ARBITRARILY WITHOUT COSNIDERING THE CASH FLOW STATEMENT FILED BEFORE THEM. 3 THAT THE APPELLANT CRAVES LEAVE TO INTRODUCE, MODIFY OR WITHDRAW ANY GROUND OF APPEAL WITH YOUR HONOURS KIND PERMISSION. 6. At the time of hearing, ld. AR of the assessee brought to my notice detail submissions submitted before First Appellate Authority and made similar submissions has submitted before ld. CIT(A). 7. On the other hand, ld. DR relied on the findings of lower authorities. Printed from counselvise.com ITA No.539/Agr/2025 4 | P a g e 8. Considered the rival submissions and material placed on record. I observe that the assessee has made cash deposit in his bank account and in order to verify the same the Assessing Officer asked the assessee the submit the relevant details. After considering the cash flow statement submitted by the assessee. The Assessing Officer observed that assessee has declared opening cash balance of Rs. 3,50,000/- and not convinced with submission of the assessee on carrying in such cash balance in hand. He proceeded to make the above cash in hand as undisclosed income. After considering the submissions of both parties, I noticed from the cash flow statement submitted for the period 01.04.2009 to 31.03.2010, the assessee has withdrawn cash from State Bank of India, ICICI Bank to the extent of Rs. 32.04 lakhs and deposited Rs. 25.75 lakhs, out of cash withdrawn assessee has utilized Rs. 2.24 lakhs toward household expenses. I observe that the difference between cash withdrawals and cash deposit plus household expenses is about Rs. 5.05 lakhs excess. Since the cash deposit is out of cash withdrawals made by the assessee, it matches with the submission made by the assessee that he lends money to others out of cash in hand. In my considered view the Assessing Officer proceeded to treat the opening cash in hand as undisclosed income, the cash deposit are out of cash withdrawals, that being the case, the opening cash balance cannot be treated as income from the years under Printed from counselvise.com ITA No.539/Agr/2025 5 | P a g e consideration. Therefore, the addition made by the Assessing Officer is accordingly deleted. In the result grounds raised by the assessee are allowed. In the result, appeal filed by the assessee is allowed. Order pronounced in the open court on 20.02.2026 Sd/- (S. RIFAUR RAHMAN) ACCOUNTANT MEMBER Dated:20.02.2026 *Ganesh Kumar, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Agra Printed from counselvise.com "