AKSHAT LOYALKA,JAIPUR V. RJN-C-(101)(1), JAIPUR

ITA 1019/JPR/2024

AI Insights

This case involves an appeal by Sh. Akshat Loyalka against the order of the ld. CIT(A), National Faceless Appeal Centre, Delhi, which confirmed the additions made by the Income Tax Officer (ITO) under section 69A of the Income Tax Act, 1961, for the assessment year 2016-17. The additions were made on account of unexplained cash deposits totaling Rs. 12,30,000 in the assessee's bank account. The ITO and CIT(A) rejected the assessee's explanations and evidence, leading to the appeal before the Income Tax Appellate Tribunal, Jaipur. The Tribunal considered the detailed submissions and evidence presented by both parties, including the assessee's cash book and bank statements, and noted discrepancies in the findings of the lower authorities regarding the availability and source of the cash deposits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 397062 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Other Referred Cases: Gangasharan & Sons Pvt. Ltd. v/s ITO & Anr, ITO v/s Lakhmani Mewal Das, Collector, Land Acquisition vs. Mst. Katiji, CIT v. P. Mohanakala, CIT vs. Kulwant Rai, Anand Prakash Soni v/s DCIT, Radheyshaym Agarwal Vs. ITO,Ward 5(2), Jaipur, Dhakeshwari Cotton Mills v/s CIT, CIT (Central) v/s Daulat Ram Rawatmull, CIT v/s Bedi & Co. Pvt. Ltd., Karanpura Development Co. Ltd vs. CIT, Nalinikant Ambalal Mody v CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GAUTAM SINGH CHOUDHARY
• Assessee Lawyers: MAHENDRA GARGIEYA; HEMANG GARGIEYA
• Keywords: Condonation of delay; Reassessment proceedings; Question of law; Corroborative evidences; Salary income; Income from undisclosed sources; Onus to prove; Period of limitation; Principle of natural justice; Search and seizure; Block assessment; Source of fund; Reason to believe; Charitable institution; Right to appeal; Time period of passing order
• Section: 147; 148; 56; 68

Judgement Text

"vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBkSM+ deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 1019/JPR/2024 fu/kZkj.k o\"kZ@Assessment Years : 2016-17 Sh. Akshat Loyalka, D-133, Durga Marg, Bani Park, Jaipur. cuke Vs. Income Tax Officer, Exemption Ward-1, Jaipur./RJN-C-(101)(1) LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: ABLPL1129K vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assesseeby : Shri Mahendra Gargieya, Advocate & Shri Hemang Gargieya, Advocate. jktLo dh vksjls@Revenue by :Shri Gautam Singh Choudhary, Addl. CIT-DR lquokbZ dh rkjh[k@Date of Hearing : 17/04/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement : 27/05/2025 vkns'k@ORDER PER: DR. S. SEETHALAKSHMI, J.M. This is an appeal filed by the assessee against the order of ld. CIT(A), National Faceless Appeal Centre ( in short NFAC), Delhi dated 27.05.2024 passed under section 250 of the I.T. Act, 1961, for the assessment year 2016-17. The assessee has raised the following grounds of appeal :- “1. The impugned order u/s 147 r.w.s 144B of the Act dated 25.05.2023 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be quashed. 2 ITA No. 1019/JPR/2024 Shri Akshat Loyalka, Jaipur. 2.The ld. AO/NFAC seriously erred in law as well as on the facts of the case in not adhering to the mandatory procedure statutorily prescribed u/s 144B of the Act. Hence, the impugned order so passed deserves to be quashed being in violation thereof. 3. Rs.12,30,000/-: The ld. CIT(A) has erred in law as well as in facts in confirming the additions made on account of unexplained cash deposit in bank account u/s 69A of the Act. The addition so made and the confirmation thereof by the ld. CIT(A) being contrary to the provisions of law and facts of the case, the same kindly be allowed in full. 4.The ld. AO further erred in law as well as on the facts of the case in imposing tax, surcharge, cess etc. as per provision of S. 115BBE of the Act. The invoking of S.115BBE is contrary to the provisions of law, on facts and without jurisdiction. The appellant totally denies its liability. The tax liability so created, kindly be deleted in full. 5. The ld. CIT(A) erred in law as well as in facts of the case in confirming the levy of interest u/s 234A, 234B, 234C& 234D of the Act. The levy interest being charged, is contrary to the provisions of law and facts, kindly be deleted in full. 6. The appellant prays your honor indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing.” 2. We find that as per order sheet placed in the case file, the appeal was filed on 01.08.2024 whereas the appeal was due to be filed on or before 26.07.2024. Thus there is a delay in filing the appeal by 6 days. But, as per the application for Condonation of delay, filed by the assessee, the appeal was e-filed on 16.07.2024 and challan was duly submitted on 09.07.2024, so there is no delay caused in filing the appeal. However, the appeal was physically filed on 03.10.2024. The application for condonation of delay is reproduced hereunder : ” Application u/s 5 of Limitation Act for Condonation of Delay. Respected Sir, The humble assessee most respectfully begs to submit as under: 3 ITA No. 1019/JPR/2024 Shri Akshat Loyalka, Jaipur. 1. That in the aforesaid matter, the ld. NFAC/CIT(A) passed the Order on dated 27.05.2024. Accordingly, the appeal was to be filed on/before 26.07.2024. In the facts of the present case the appeal before Hon’ble ITAT, Jaipur bench, Jaipur was e-filed on dated 16.07.2024 and challan was duly submitted on 09.07.2024. Thereby ensuring there was no delay in the filing of the appeal. 2.It is only the physical filing of the appeal was filed on dated 03.10.2024. Hence there is no delay in filing of appeal as such. Prayer: It is, therefore, humbly prayed that this application may kindly be allowed in the interest of justice. Any other order, which this Hon’ble ITAT deems fit and proper, be also passed in favour of applicant assessee. 3. We have considered the facts mentioned by the assessee in the application for condonation of delay. However, taking a lenient view and considering the principles laid down in the case of Collector, Land Acquisition vs. Mst. Katiji, 1987 AIR 1353 (SC) and in the interest of justice, we condone the delay of 6 days in filing the appeal before us. 4. The brief facts of the case are that the assessee is an individual. During the year under consideration the assessee filed return of income on 30.07.2016 by declaring total Income for the year consideration of Rs. 24,04,760/-. The assessee’s case was reopened u/s 147/148 of the Income Tax Act, 1961 recording the reason that the assessee has deposited cash totaling Rs.12,30,000/- in his bank account. Thereafter a notice u/s 148 of the Act was issued on 28.07.2022, in response the assessee filed return of income on 21.05.2021 declaring total income at Rs. 4 ITA No. 1019/JPR/2024 Shri Akshat Loyalka, Jaipur. 24,04,760/- as was originally declared. Subsequently show-cause notice was sent on 25.04.2023, requesting the assessee to clarify why the cash deposit in assessee’s bank account should not be treated as unexplained u/s 69A of the Act. The assessee vide its various replies explained that the cash deposited was derived from the prior withdrawals from the assessee’s own bank account. Despite this, the AO observed that the cash book provided by the assessee was an afterthought, created just to justify the cash deposit made by the assessee during the year under consideration. The AO while discussing these cash deposit observed the following:-  On perusal of the cash book, it is seen that the assessee withdrew cash on different dates and has also deposited cash on different dates from his bank account. However, there is gap between the date of withdrawal and date of deposit.  The assessee’s books of account are not audited and the cash book s not acceptable. Secondly the assessee is not required to maintain to cash book.  The assessee is a man of high Net worth and allocation of Rs. 20,000/- per month only towards house hold expenditure is not justifiable. He is partner in three firms namely Noble Dyers, Shyam Sunder Minerals, Associated Exports and getting huge profit from these firms as share of profit. He is also a trustee in M/s P S Loyalka Charitable Trust. The assessee has also shown income form capital gain on sale of shares and other income. Considering his income and net worth his house hold expenses are estimated at Rs. 1,25,000/- per month.  Considering his worth and stature it is quite possible that money withdrawn from banks are utilized towards house hold expenses.  In the assessment order of the assessee’s own case for AY 2017-18 was perused and it was found that during the assessment proceeding for that year the assessee, while justifying the cash deposited in his account during the demonetisation period, had submitted that the total withdrawal for the period 01.04.2013 to 01.11.2016 was Rs. 6,41,000/- only and out of that it saved Rs. 1,95,000/- to deposit it during the demonetisation period. The above submission of the assessee was rejected by the assessing officer for that year. Thus it is seen that the assessee is in habit of showcasing 5 ITA No. 1019/JPR/2024 Shri Akshat Loyalka, Jaipur. utilisationof cash withdrawals for any reason, which suits his purpose best. The assessee is in habit of allocating lesser amounts towards house hold expenses out cash withdrawals.  It is quite improbable, unrealistic and astonishing that a prudent person will withdraw money from his bank account only for depositing it on later date, thus the contention of the assessee that withdrawn money was subsequently deposited is not acceptable as the assessee has not furnished any cogent reason for withdrawing the money and subsequently depositing it in the bank account.  In para V of his submission the assessee has submitted that he withdrew money and subsequently deposited it to show fictitious transaction in bank account for the purpose of obtaining finance or otherwise. This contention is not acceptable as such transactions are done with the intention to cheat the bank for obtaining loan/finance etc. If this was the intention of assessee to forge his bank account to reflect higher transaction it is an illegal act and the same cann’t be accepted as justification. Being not satisfied with the replies submitted by the assessee, the AO passed the order u/s 147/148 dated 25.05.2023 determining the total income at Rs. 39,37,666/- by making an addition of Rs. 12,30,000/-. 5. Aggrieved by the order of the AO, the assessee preferred appeal before the ld. CIT (A), who confirmed the addition by observing in para 6.5 and 6.6 page 15 of his order as under :- “ 6.5 As the assessee has not substantiated the source of cash deposits, the assessment was completed by AO adding entire cash deposits in the background of lack of documentary evidence. Even before the CIT(A)’s the assessee has not submitted any documentary evidence in support of the claim. 6.6 The main claim of the assessee is that the AO has added income from cash deposits to the income filed by the assessee. On going through the submission of the assessee and the assessment order it is clear that the assessee has not submitted any details to the AO or this office on why the income should not be as adopted by the AO. No documentary proof that such submission were made are submitted to this office. It is the 6 ITA No. 1019/JPR/2024 Shri Akshat Loyalka, Jaipur. duty of the assesseeto explain to the satisfaction of the AO or appellate authorities on why such receipts are not to be treated as income. As the assessee has not provided with any documentary proof or logical explanation on why the same could not be added, the action of the AO in adding such receipts as income is right. In the above background it is very clear that what AO has done is as per law and I do not find any infirmity on part of the AO. In the above background the appeal filed by the assessee is dismissed.” 6. Aggrieved by the order of the CIT(A), the assessee preferred appeal before the appeal before the Tribunal on the grounds reproduced herein above. Before us, the ld. AR of the assessee submitted his written submissions, which are being reproduced hereunder : “ 1.Reason to believe and not reason to suspect: 1.1 It is submitted that even under the amended law the bedrock condition or words, which continue right since inception till date, are “reason to believe\" and not \"reason to suspect\". The word “believe” has to be understood in contradistinction of suspicion or opinion. Belief indicates something concrete or reliable. Kindly refer Gangasharan& Sons Pvt. Ltd. v/s ITO &Anr. (1981) 130 ITR 1 (SC) and Hon’ble Supreme Court in the case of ITO v/s LakhmaniMewal Das (1976) 103 ITR 437 (SC) has held that: “12. The powers of the ITO to reopen assessment, though wide, are not plenary. The words of the statute are \"reason to believe\" and not \"reason to suspect\". The reopening to the assessment after the lapse of many years is a serious matter. The Act, no doubt, contemplates the reopening of the assessment if grounds exist for believing that income of the assessee has escaped assessment. ------------ The provisions of the Act in this respect depart from the normal rule that there should be, subject to right of appeal and revision, finality about orders made in judicial and quasi-judicial proceedings. It is, therefore, essential that before such action is taken the requirements of the law should be satisfied. - -----” 1.2 The belief of the officer should be as to escapement of income and the belief should not be a product of imagination or speculation as further discussed in the ensuing paras. 1.3 Further, the belief must be of an honest and reasonable person based upon reasonable grounds. The officer may act on direct or circumstantial evidence, but his/her belief must not be based on mere suspicion, gossip or rumor. The ld. AO 7 ITA No. 1019/JPR/2024 Shri Akshat Loyalka, Jaipur. would be acting without jurisdiction if the reason for his/her belief that the conditions are satisfied does not exist or is not material or relevant to the belief required by the provision of law. 1.4 In fact, by over stressing the contention that prima facie belief was there one cannot convert a suspicion into a belief. Therefore, unless a specific reliable and meaningful (Non vague) is in possession of the ld. AO, there was no existing reason i.e. cause or justification to have a reasonable belief. Surprisingly, no exercise at all was done by him, to further enquire into the information received. Thus, he did not have a bona-fide and honest reason to believe. 1.5 Based on the facts of the present case, it is clear that all the documents including the cash book (PB 29-32) &bank statements (PB 16-28), were originally submitted to the authorities below. The cash deposited was out of the cash withdrawals from the bank on different dates which can be understood from the table below. Therefore, there exist no reason for the ld. AO, even to suspect or to believe and invoke S.147 of the Act. Hence, the invocation of S. 147 of the Act itself is incorrect and notice u/s 148 of the Act deserves to be quashed. 2. Source Fully Explained: At the outset it is submitted that the Assessee has duly and fully explained the source of cash deposit of Rs. 12,30,000/- made in the bank account during A.Y. 2016-17 with the help of the regularly maintained cash book on day-to-day basis and bank statement. It cannot be disputed that the complete copy of the said cashbook for the subjected period starting from 01.04.2015 to 31.03.2016 (for A.Y. 17- 18) was duly submitted in earlier submission thereof. A bare perusal of the cash book on the different dates of deposits shall reveal that the appellant was having sufficient cash in hand on the eve of the cash deposits. For the sake of convenience, a chart is appended herein below showing the different dates of cash deposits in the bank accounts vis-à-vis the availability of the cash in hand in the dates of deposits, as under :- DATE CASH WITHDRAWN (RS.) CASH DEPOSIT (RS.) PB 30.04.2015 50,000 16 09.07.2015 1,75,000 18 10.07.2015 1,00,000 18 03.08.2015 1,00,000 18 01.09.2015 1,00,000 20 17.10.2015 2,00,000 21 19.10.2015 30,000 21 27.10.2015 2,00,000 21 26.11.2015 1,00,000 22 03.12.2015 2,00,000 23 8 ITA No. 1019/JPR/2024 Shri Akshat Loyalka, Jaipur. 11.12.2015 4,00,000 23 04.01.2016 1,00,000 25 20.01.2016 2,00,000 25 21.01.2016 1,00,000 25 03.02.2016 4,00,000 26 08.02.2016 2,00,000 26 18.03.2016 25,000 28 TOTAL 14,50,000 12,30,000 Copies of the complete cashbook for A.Y. 2016-17 were required and submitted. Moreover, it is pertinent to mention that the cash which are being withdrawal are duly verifiable from the bank statement and on that basis the entries have been made in cash book. Likewise, the cash deposited are also verifiable from the bank statement. Hence it is clear that the books of accounts are reliable and entries therein are based on the corroborative evidences. 3.Addition u/s 69A – not valid: The allegation made by the ld. AO regarding the legitimacy of the cash deposits amounting to Rs. 12,30,000/- made into the bank account of the appellant are without any merit. During the course of assessment proceedings, the assessee clearly depicted that the cash deposited into bank was out of withdrawals from the bank time to time. In support of which the day-to-day cash book (PB 29-32) along with proper narrations and the bank statement (PB 16-28) were furnishedfrom time to time. This fact clearly establishes that the source of cash deposit was out of cash withdrawals from assessee’s own bank account. 3.1The ld. AO while making this addition alleged that the assessee’s books of account are not audited and the cash book is not acceptable. He further alleged that the assessee is not required to maintain cash book andkeeping in view the contention of ld.AO it may be submitted that though the assessee is not required to maintain cash book as per law but it doesn’t mean that by maintaining cash book, he has committed any offense. Just because that the law does not require him to maintain the books of account the ld. AO cannot consider the cash book unacceptable without bringing any contrary evidence on record. It clearly shows that the addition has been made by the ld. AO arbitrarily without pointing out any defects in the cash book produced during the course of assessment proceedings. 3.2 Supporting Case Law: A reference has been made to the decision of Hon’ble Delhi ITAT in the case of Mool Chand Aggarwal vs. ACIT ITA No.1786/Del/2022 whereby it was heldthat: CIT (A) cannot disbelieve cash book only on the ground that “generally individual” do not maintain cash book and it is not mandatory to maintain cash book for the individual. 9 ITA No. 1019/JPR/2024 Shri Akshat Loyalka, Jaipur. 3.3Further it was alleged by the AO that“cash withdrawn was spent by the assessee however to make source of cash deposits look genuine the assessee claimed that cash withdrawn was again deposited in bank account. He also alleged that cash book submitted by the assessee was an afterthought on his part to account for cash deposited by him in his bank accounts.” 3.4 It may humbly be submitted that this is your own presumption and assumption that the cash withdrawn was spent by the assessee but you have not brought on record that where the assessee spent the cash withdrawn. And if the cash withdrawn was spent by the assessee, then from where he brought the cash to deposit into the bank account?As the assumption being drawn by the assessee is truly baseless because as the justification not being given by the AO as where the assessee spent the withdrawn cash so the burden of proof rely on him and the addition which has been made just on the basis of presumptions and afterthought is not acceptable in the eyes of law. 3.5 Supporting Case Law: A reference has been made to the decision of Hon’ble Supreme Court in the case of CIT v. P. Mohanakala (SC) 291 ITR 0278 (2007) whereby it was held that: “A bare reading of section 68 suggests that there has to be credit of amounts in the books maintained by assessee’s; that such credit has to be of a sum during the previous year; and that the assessee’s offer no explanation about the nature and source of such credit found in the books or the explanation offered by the assessee’s in the opinion of the Assessing Officer is not satisfactory. It is only then the sum so credited may be charged to income-tax as the income of the assessee’s of that previous year. The expression 'the assessee’s offer no explanation' means where the assessee’s offer no proper, reasonable and acceptable explanation as regards the sums found credited in the books maintained by the assessee’s. It is true that the opinion of the Assessing Officer for not accepting the explanation offered by the assessee’s as not satisfactory is required to be based on proper appreciation of material and other attending circumstances available on record. The opinion of the Assessing Officer is required to be formed objectively with reference to the material available on record. Application of mind is the sine qua non for forming the opinion”. ---------×××-----------×××-------------×××--------------×××--------------- 3.6 That the ld. AO has made the alleged addition to the income on the basis of an alleged mismatch between the dates of withdrawal and deposit of cash in the assessee's bank account. The ld. AO has drawn a conclusion that since there exists a significant gap between the withdrawal and subsequent deposit of cash, its implies thatthere exist 10 ITA No. 1019/JPR/2024 Shri Akshat Loyalka, Jaipur. ainconsistency in the financial transactions.However, this conclusion is factually incorrect and contrary to the evidence available on record. A perusal of the Cash Book maintained by the assessee clearly demonstrates that there is no substantial gap between the dates of withdrawal and deposit. The gap between the dates of withdrawal and deposit in certain instances is no more than 15 to 20 days, which is not unusual or abnormal in the normal course of business operations. It is well established that a reasonable period between withdrawal and deposit of cash does not, in itself, raise any presumption of the funds being unaccounted or improperly utilized. The gap of 15 to 20 days in the present case is consistent with routine cash management practices and cannot be considered as unusual or suspicious until the AO brings any contrary evidence on record. Therefore, the conclusion drawn by the ld. AO on this ground lacks merit and should be disregarded. Even otherwise, assuming that the gap between the dates of cash withdrawals and deposits are more than 15-20 days, as in this case, then also no provision of law bars the assessee to maintain such cash in hand, if the assessee’s can explain the source of the case in hand and income is taxed as per the provisions of law. 3.7 Further the ld. AO contended in Para (3) & (4) at page no. 5 of the order that“assessee is a man of high Net worth and allocation of Rs. 20,000/- per month only towards house hold expenditure and also assessee is a partner in three firms namely Noble Dyers, Shyam Sundar Minerals & Associated Exports and deriving huge profit from these firm as share of profit. The assessee also shown income from capital gain on sale of shares and other income by presuming all these the AO estimated the household expense at Rs. 1,25,000/- per month”. In regards to this allegation of the AO, we would like to submit that the amount which has been estimated by the ld. AO is without any justification as he has not brought any record on material on the basis of which he assumed the household expenses at Rs. 1,25,000/- per month. It may be noted that assessee was living in a joint family with his father and brother in their house and all the family members contributed towards the household expenses. Additionally, the assessing officer completely ignored the fact that the assessee’s has separately withdrawn funds for household expenditure, still leaving cash in hand to deposit. It may be submitted that the expenses which has been done towards foreign travel, insurance premiums and even there are separate withdrawals for household expenditures etc., were furnished by the assessee which can be seen from the capital account of the assessee at (PB 25). 11 ITA No. 1019/JPR/2024 Shri Akshat Loyalka, Jaipur. 3.8.The ld. AO further questioned that the explanation of regular cash withdrawal was not given. (Pr. No. 5). In this regard it was submitted that during the assessment proceedings the assessee during the year was exploring to start some new project and for that purpose he approached to the banker to have idea about the financing for the said project. The bank officials suggested that because the assessee was not having any existing business or industry, he should have appropriate transactions in his bank account so that the healthy net worth may be established. Therefore, the assessee regularly withdrawn cash and thereafter depositing cash out of the same into the bank account, so that appropriate transaction may be reflected in the bank account. Later on, the assessee started a proprietary firm in the name of M/S Mystique Ventures and he made continuing efforts to get some viable project during the year under consideration. The ld. AO in the assessment order at pr. (5) at pg. no. (4) stated that these transactions were fictitious and done with the intention to cheat the bank for obtaining loan/finance and it was illegal. From the aforesaid apprehension of the ld. AO it seems that he himself cooked a story just to make a high pitch assessment. The transactions done by the assessee were genuine and within the four corners of law. All the cash deposited time to time was out of the cash withdrawals from the bank and no other cash was received, hence nexus/link is very much established.In view of the above it is crystal clear that the assessee has fully explained the source of deposit of cash into the bank account and as such nothing remained unexplained. Therefore, under the above facts and circumstances the addition of Rs. 12,30,000/- made by the ld. AO and confirmed by CIT (A) u/s69A of the Act is unjustified, unwarranted, illegal and may kindly be deleted in full. 4. Availability of sufficient Cash funds: 4.1. Utilization of cash withdrawals elsewhere, not established by the AO:It is very pertinent to note that the AO admitted that there were substantial cash withdrawals therefrom. However, surprisingly, he ignored and rather avoided giving credit of availability of cash therefrom towards the subjected bank deposits merely on suspicion. It is not the case of the AO that such cash withdrawals were made long time back (various years) which might not have been available. Nor he has alleged that the cash so generated from the income of the earlier years, stood utilized elsewhere and was not available with the assessee in the current year for onward deposit in the bank. The contention of cash withdrawals and availability within the same financial year is not abnormal. 12 ITA No. 1019/JPR/2024 Shri Akshat Loyalka, Jaipur. The law is well settled that unless the AO has established the utilization of the cash generated from the income admitted and assessed, the availability of the same cannot be denied unless the AO has fully establish the utilization of the same elsewhere. On the contrary, in this case the AO himself has admitted the availability of sufficient cash but wrongly ignored the availability of the same. Supporting Case Laws on availability of funds:The Hon’ble High Courts and the Tribunals in different factual situations have considered the availability of the cash when the Dept. failed to establish that such cash which was made available in hands of the assessee because of the withdrawal from the banks or sale proceeds of the jewellery and so on, utilised elsewhere, held that no addition can be made. In the instant case, the undisputed fact of sufficient cash withdrawals immediately prior to the subjected bank deposits, the AO was not supposed to doubt the explanation of the assessee, more particularly, in view of the following cases, which is a settled law now: 4.2.1Kindlyrefer CIT v/s P.V. Bhoopathy(2006) 205 CTR 495 (Mad)held: “Appeal (High Court)—Substantial question of law—Income from undisclosed sources—AO did not accept various sources of income explained by the assessee and made additions under ss. 68 and 69 in respect of difference between the investments and the sources accepted by him—Tribunal accepted the explanation of the assessee vis-a-vis availability of funds with the assessee from the sale proceeds of jewellery belonging to his mother- in-law, receipt from a party and also the amount of opening balance and savings from earlier years and deleted all the additions—Findings recorded by the Tribunal are purely findings of fact—There is no reason to interfere with the same—No substantial question of law arises—CIT vs. Pradeep ShantaramPadgaonkar (1983) 143 ITR 785 (MP) relied on” 4.2.2Also refer CIT vs Kulwant Rai (2007) 210 CTR 380 (Delhi) para 16-17, wherein it was held as under: “Search and seizure—Block assessment—Computation of undisclosed income—Cash found during search—Assesseehad withdrawn Rs. 2 lakh from bank some time back and there is no material with the Department to show that this money had been spent and was not available with the assessee—Tribunal has found that the withdrawals shown by the assessee are far in excess of cash found during the course of search— In the absence of any material to support the view that the entire cash withdrawals must have been spent by the assessee, Tribunal was justified in holding that the addition was not sustainable—Order of the Tribunal does not give rise to a substantial question of law” In this case, cash was found on search carried out on 04.02.2001 and was explained to be out of the cash withdrawal in Dec-2000. 13 ITA No. 1019/JPR/2024 Shri Akshat Loyalka, Jaipur. 4.2.3Also refer Anand Prakash Soni v/s DCIT (2006) 101 TTJ 97 (Jd) Para 5-6 “Search and seizure—Block assessment—Computation of undisclosed income—Cash found during search—Assessee is entitled to furnish cash flow statement to explain the transactions when no books of account are maintained—In such circumstances it becomes the duty of the AO to verify the balance sheet and cash flow statement with the necessary material including the details already filed along with the returns in the past—Assessee explained that the cash found at the time of search was withdrawn from the bank some time back which was partly used for purchasing gold and part of the amount was given by the assessee to his wife—There is nothing to suggest the utilization of the withdrawal amount elsewhere—Said withdrawal is duly reflected in the cash flow statement and closing cash balance is more than the amount found at the time of search—Thus, addition cannot be sustained” 4.2.4 Radheyshaym Agarwal Vs. ITO,Ward 5(2), Jaipur ITA No. 33/JP/2014para 3.6-& 3.7: “We have heard the rival contentions and perused the materials available on record. Apropos addition of Rs. 6.00 lacs, the same has been made mainly relying on the fact that the assessee was an old person and living alone and there was a time gap of 10 months for keeping the cash at home which was not possible on preponderance of probabilities. It may be mentioned that assessee while explaining the low house hold withdrawals assessee had already submitted before the lower authoritiesthat he was living in a joint family of two sons. With these facts on record, there was no reason for the lower authorities to hold that the assessee was living alone which could be the reason for any adverse inference that cash in hand could not be retained by the assessee for 10 months. There is no factual basis in the presumption drawn by the AO and the ld. CIT(A), besides the assessee may be aged but remained active in his business affairs. Consequently we see no justification in addition of Rs. 6 lacs more so when the facts about cash books, cash flow and receipt of cheque of Rs. 13 lacs from M/s. S.G. Fiscal have not been controverted. In view thereof, we are unable to uphold the addition of Rs. 6.00 lacs which is deleted. Thus Ground No. 2 of the assessee is allowed.” “Apropos low house hold withdrawals, the assessee is an active person, earning from two partnership firms. It has been contended that his two sons have borne the house hold expenses and have sufficient withdrawals. There is no evidence on record to demonstrate that quantum of withdrawals by two sons and statement to the fact that their father did not contribute any house hold expenses. Beside the size of their family and extent of house hold withdrawals have no evidence on record to hold that assessee's version is correct. Thus in these facts and circumstances of the case assessee’s explanation is not corroborated by any iota of evidence. In view thereof, we hold that an addition of Rs. 1.00 lac on account of house hold withdrawals has rightly been made by the lower authorities which is upheld. Thus Ground No. 3 of the assessee is dismissed.” 14 ITA No. 1019/JPR/2024 Shri Akshat Loyalka, Jaipur. 5.Onus on the AO – not discharged: 5.1 Unless the availability of the cash is proved to have been utilized elsewhere or is proved to be non-existent prior to the deposits in bank, the AO was not legally justified to suspect and make addition. 5.2 What is apparent is Real – Onus not discharged: It is a settled law that what is apparent is real unless controverted. The onus lay upon the person, who alleges that what is apparent is not real. Kindly refer CIT (Central) v/s Daulat Ram Rawatmull (1973) 87 ITR 349 (SC), followed in CIT v/s Bedi & Co. Pvt. Ltd. (1998) 230 ITR 580 (SC). In the present case, the AO has proceeded on mere suspicion, surmises and conjectures. No contrary evidence is brought on record to show/ disprove the vital fact and contention that sufficient cash was available with the assessee’s as cash in hand and thus, failed to show that what is apparent was not real. In any case, the AO could not disprove the availability of the cash so withdrawn or that the cash so withdrawn stood utilized elsewhere. Hence, what apparent was real. 5.2.1Mere suspicion not sufficient: It is well settled that suspicion howsoever strong, cannot take place of reality. Kindly refer Dhakeshwari Cotton Mills v/s CIT (1954) 26 ITR 775 (SC). Thus, it was fully established beyond all reasonable doubts that there was sufficiency of cash available and in absence of any evidence of utilization thereof elsewhere, the same was deposited in the bank. GOA 4: Application of Sec. 115BBE – invalid 1.1 Invoking Sec.115BBE of the Act is without jurisdiction:The ld. AO Vaguely invoked Sec.115BBE of theAct absolutely without any discussion. On merits, there is absolutely no case made out by AO to invoke Sec.115BBE of the Act since there is no escaped income at all. It is submitted that S.115BBE of the Act specifically refers to the income which are of the nature as referred in S. 68 ,69 ,69A of the Act being the income from other sources. Therefore, subjected income has essentially to be classified u/s 14 of the Act as income from other sources and that is possible only when the income is not capable of being classified under any other head being income from salary, house property, capital gain, business or profession. A combined reading of S. 14with S. 56 of the Act makes is evidently clear that for the assessment of an income it must have to be classified under four heads of income as enumerated u/s 14 of the Act and if it doesn’t fall under any specific head of income as per item A to E of S. 14 of the Act, such income has to be assessed under the residuary head of income i.e. item F of S. 14 of the Act. Therefore, income added u/s 68 or 69 of 15 ITA No. 1019/JPR/2024 Shri Akshat Loyalka, Jaipur. the Act etc. has to be given a specific head in terms of S. 14 of the Act, however, since there is no income as such which could be added u/s 68,69, 69A of the Act etc. hence there is no question of invoking of S.115BBE of the act. 1.2 Supporting Case Law: 1.2.1A reference has been made to the decision of Hon’ble Supreme Court in the case of Karanpura Development Co. Ltd vs. CIT [1962] 44 ITR 362 (SC)whereby it was held that: “these heads are in a sense exclusive to one another and income whichfalls within one head cannot be brought to tax under another head”. 1.2.2Further, to rely more upon in the case of Nalinikant Ambalal Mody v CIT [1966] 61 ITR 428 the Hon’ble Supreme Court held that: “Whether an income falls under one head or another is to be decided according to the common notions of practical man because the Act does not provide any guidance in the matter. Of course, lot of judicial precedents are available to a taxpayer to arrive at a conclusion about determination of appropriate head of income. There apart, there are many decisions available taking such a view in favor of the assessee on dated 21.12.2019 when the subjected assessment was framed by the AO. The above very relevant and crucial facts and the legal position was well available before the AO and there is nothing on record to show that he did not consider the same”. Moreover, there is no income from other sources. Therefore, the invoking of S.115BBE of the Act deserves to be quashed.” 6.1 The assessee has further submitted additional written submission as under :- “1. Impugned Notice u/s 148 – Time Barred 1.1 S. 148A of the Act reads “…The Assessing Officer shall, before issuing any notice under section 148…”. The language of the Sec 148A is clear, unambiguous and obliges the ld. AO to comply with the prescribed procedure before issuance of any Notice u/s 148 of the Act. Such procedure, is a precursor to the issuance of the issue u/s 148 of the Act and therefore, has to be initiated within the stipulated period of limitation u/s 149 of the Act. Hence, in the amended law any Reopening proceedings even though proposed to be initiated has to be in accordance with the mandatory condition prescribed u/s 148A, 148 and 149 of the Act. 16 ITA No. 1019/JPR/2024 Shri Akshat Loyalka, Jaipur. 1.2 In instant case, the impugned reopening notice u/s 148 of the Act was issued on 13.05.2021 initially and then again on 26.07.2022 citing the judgement of Ashish Agarwal (2022) 138 taaxmann.com 64(SC) respectively. However, the initial notice itself is beyond the period of three years as provided in the Proviso to Sec. 149(1)(b) of the Act, as the same falls on 31.03.2020 for A.Y. 2016-17 and therefore, is clearly barred by limitation in as much as the newly inserted S. 149 by Finance Act, 2021, has reduced the general period for issuance of notice u/s 148 of the Act to 3 years as against the earlier period of 4 year/6 year or 16 years in the pre amended law. In other words, no notice u/s 148 can validly be issued beyond the period of 3 years from the end of relevant assessment year unless the case clearly falls within the parameters of section 149(1)(b) for a larger period of 10 years on the fulfillment of certain additional conditions prescribed therein. In any case however, S. 149(1)(b) is circumscribed by the Proviso further reducing the period up to 6 years only. Consequently, the impugned Show Cause Notice issued u/s 148A(b) dated 27.05.2022, impugned order u/s 148A(d) dated 26.07.2022 and notice u/s 148 could not have been issued by the Respondent-AO on dated13.05.2021/26.07.2022w.r.t A.Y. 2016-17 as reckoning 3 years falls on 31.03.2020 respectively hence, the same is beyond the time permissible as per the as per the existing provisions of law. 1.3 A bare reading of the proviso to Sec 149(1)(b) clearly indicate that the alleged escaped taxable income must be Rs.50 lakh or more then only the benefit of the extended time limit is permissible. Further, the normal limitation period expires on the completion of 3 years from the end of relevant AY which is 2016-17. Since, in this case there is no taxable income escaped assessment (or escaped income Rs. 12,30,000/- is below Rs. 50 Lakh, if assumed), only normal period of limitation of 3 years shall apply if so required. Hence the impugned notice u/s 148 is barred by limitation and deserves to be quashed. The above submissions have been made based on the instructions and the information provided of/by the client.” 7. On the other hand, the ld. DR supported the orders of the Revenue authorities. 8. We have heard rival submissions, perused the material on record and gone through the orders of the lower authorities. Ground no. 1 & 2 relate to challenging the initiation of proceeding u/s 147/148 of the I.T. Act, 1961 and 17 ITA No. 1019/JPR/2024 Shri Akshat Loyalka, Jaipur. passing of the assessment order u/s 147/148B of the IT Act. The detailed submissions were made by the assessee that it was a mere case of suspicion and no reason to believe existed. However, after carefully considering the entire material on record and the information received by the Assessing Officer detailed in the assessment order, we are not inclined to accept the contentions raised. The law is well settled that while initiating the reassessment proceedings reasons to believe or information cannot be found at fault saying that the same was insufficient. It is not the stage to reach to a conclusion but the AO is required only to form a prima facie belief as to escapement. Thus, these grounds taken by the assessee are hereby dismissed. 8.1 Ground no. 3 relates to addition of Rs. 12,30,000/-under section 69A of the IT Act, 1961 on account of unexplained cash deposit in the bank account of the assessee during the relevant previous year. During the assessment proceedings, the assessee was asked to clarify why the cash deposit in assessee’s bank account and why the cash deposit should not be treated as unexplained u/s 69A of the Act. In response, the assessee explained that the cash deposited was derived from the prior withdrawals from the assessee’s own bank account. The contentions of the assessee that the cash so deposited came out of the withdrawals made from the assessee’s own bank account, was rejected by the AO. The AO noted that on 18 ITA No. 1019/JPR/2024 Shri Akshat Loyalka, Jaipur. perusal of the cash book, it is seen that the assessee withdrew cash on different dates and has also deposited cash on different dates from his bank account. However, there is gap between the date of withdrawal and date of deposit. The assessee’s books of account are not audited and the cash book is not acceptable. Secondly the assessee is not required to maintain to cash book. The assessee is a man of high Net worth and allocation of Rs. 20,000/- per month only towards house hold expenditure is not justifiable. He is partner in three firms namely Noble Dyers, Shyam Sunder Minerals, Associated Exports and getting huge profit from these firms as share of profit. He is also a trustee in M/s P S Loyalka Charitable Trust. The assessee has also shown income form capital gain on sale of shares and other income. Considering his income and net worth his house hold expenses are estimated at Rs. 1,25,000/- per month. Considering his worth and stature it is quite possible that money withdrawn from banks are utilized towards house hold expenses. In the assessment order of the assessee’s own case for AY 2017-18 was perused and it was found that during the assessment proceeding for that year the assessee, while justifying the cash deposited in his account during the demonetisation period, had submitted that the total withdrawal for the period 01.04.2013 to 01.11.2016 was Rs. 6,41,000/- only and out of that he saved Rs. 1,95,000/- to deposit it during the demonetisation period. The above submission of the assessee was rejected by the assessing officer for that year. Thus it is seen that 19 ITA No. 1019/JPR/2024 Shri Akshat Loyalka, Jaipur. the assessee is in habit of showcasing utilisation of cash withdrawals for any reason, which suits his purpose best. The assessee is in habit of allocating lesser amounts towards house hold expenses out of cash withdrawals. It is quite improbable, unrealistic and astonishing that a prudent person will withdraw money from his bank account only for depositing it on later date, thus the contention of the assessee that withdrawn money was subsequently deposited is not acceptable as the assessee has not furnished any cogent reason for withdrawing the money and subsequently depositing it in the bank account. In para V of his submission the assessee has submitted that he withdrew money and subsequently deposited it to show fictitious transaction in bank account for the purpose of obtaining finance or otherwise. This contention is not acceptable as such transactions are done with the intention to cheat the bank for obtaining loan/finance etc. If this was the intention of assessee to forge his bank account to reflect higher transaction it is an illegal act and the same can’t be accepted as justification. On the above narration, the AO made the addition of this amount being unexplained cash deposit in the bank under section 69A of the IT Act. 8.2 The ld. CIT(A) also confirmed the addition made by the ld. AO stating that the assessee has not substantiated the source of cash deposits, the assessment was completed by AO adding entire cash deposits in the background of lack of 20 ITA No. 1019/JPR/2024 Shri Akshat Loyalka, Jaipur. documentary evidence. Even before the ld. CIT(A) the assessee has not submitted any documentary evidence in support of the claim. The main claim of the assessee is that the AO has added income from cash deposits to the income filed by the assessee. The ld. CIT (A) observed that on going through the submission of the assessee and the assessment order it is clear that the assessee has not submitted any details to the AO or this office as to why the income should not be as adopted by the AO. No documentary proof that such submissions were made are submitted to this office. It is the duty of the assessee to explain to the satisfaction of the AO or appellate authorities on why such receipts are not to be treated as income. As the assessee has not provided with any documentary proof or logical explanation on why the same could not be added, the action of the AO in adding such receipts as income is right. In the above background it is very clear that what AO has done is as per law and I do not find any infirmity on part of the AO. Thus the ld. CIT (A) upheld the addition. 8.3 Before us, the ld. AR of the assessee submitted that the assessee has duly explained the source of cash deposit of Rs. 12,30,000/- made in the bank account during A.Y. 2016-17 with the help of the regularly maintained cash book on day- to-day basis and bank statement. That complete copy of the said cashbook for the subjected period starting from 01.04.2015 to 31.03.2016 (for A.Y. 16-17) was duly 21 ITA No. 1019/JPR/2024 Shri Akshat Loyalka, Jaipur. submitted in earlier submission thereof. A bare perusal of the cash book on the different dates of deposits shall reveal that the appellant was having sufficient cash in hand on the eve of the cash deposits out of cash withdrawals from assessee’s bank. On the contrary, we find that the ld. CIT (A) observed that the assessee not substantiated the source of cash deposits and the AO added the entire cash deposits in the background of lack of documentary evidence. We do not fully agree with the finding of the ld. CIT(A) that there was a complete lack of documentary evidences to support the contention of cash availability. He himself has referred to the fact of cash flow statement. It is noticed that there was a minor gap of 15 to 20 days between the withdrawal and redeposit of cash in the bank account, which allegation of the AO, has been rejected by the CIT(A) also. With regard to his contention of utilization towards drawing is quite vague. The onus was upon the AO to have established utilization towards household drawings from undisclosed sources, which has not been done as no separate addition was made. Since contrary claims have been made on the factual aspect as regards the availability of the funds with the help of the cash flow statement, it is desirable that the ld. CIT(A) should have examined thoroughly this contention of the assessee. We, therefore, considering the principles of natural justice, restore the matter to the file of ld. CIT (A) to decide the issue afresh in the light of the above observations. 22 ITA No. 1019/JPR/2024 Shri Akshat Loyalka, Jaipur. 9. Since we have restored the matter to the file of ld. CIT (A) for afresh decision, ground nos. 4 & 5 have become academic only and needs no adjudication. 10. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 27 /05/2025. Sd/- Sd/- ¼ jkBkSM+ deys'k t;UrHkkbZ ½ ¼MkWa-,l-lhrky{eh½ (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 27/05/2025 *Santosh vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. vihykFkhZ@The Appellant- sh. Akshat Loyalka, Jaipur. 2. izR;FkhZ@ The Respondent- ITO(E), Ward-1/ RJN-C-101(1), Jaipur. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur. 6. xkMZ QkbZy@ Guard File { ITA No. 1019/JPRR/2024} vkns'kkuqlkj@By order, lgk;d iathdkj@Asst. Registrar "