AMIT JAIN,AGRA V. DCIT CIRCLE 2(1)(1), AGRA

ITA 566/AGR/2025

AI Insights

The case revolves around the assessment of Amit Jain for the Assessment Year 2017-18, where the primary contention was the addition of Rs 57,00,000 as unexplained cash deposits during the demonetization period. The assessee argued that these deposits were proceeds from the sale of silver bullion, which had been previously disclosed under the Income Disclosure Scheme, 2016. The Assessing Officer (AO) initially disbelieved this explanation, leading to the addition. However, the Tribunal found the assessee's explanation reasonable and supported by evidence, thus allowing the appeal and rejecting the addition.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 847780 (ITAT-AGRA)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Agra
• Assessment Year: 2017-2018
• Appeal Filed On: 11-12-2025
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHAILENDRA SRIVASTAVA
• Assessee Lawyers: RAJNI KANT VERMA
• Keywords: Salary income; Capital Gains; Validity of assessment
• Section: 143(3); 142(1)

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL AGRA BENCH “DB”: AGRA BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER ITA No. 566/AGR/2025 (Assessment Year: 2017-18) Amit Jain, 17, Gopal Kunj, New Agra, Agra Vs. DCIT, Circle-2(1)(1), Agra (Appellant) (Respondent) PAN: ADWPJ8978M Assessee by : Shri Rajni Kant Verma, Adv Revenue by: Shri Shailendra Srivastava, Sr. DR Date of Hearing 18/03/2026 Date of pronouncement 27/03/2026 O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in ITA No. 566/AGR/2025 for AY 2017-18, arises out of the order of the ld National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. CIT(A), in short] dated 21-10-2025 against the order of assessment passed u/s 143(3) r.w.s. 154 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 09-12-2019 by the Assessing Officer, DCIT, Ward-2(1)(1), Agra (hereinafter referred to as ‘ld. AO’). 2. The only effective issue on merits challenged by the assessee is the addition confirmed by the Learned CITA under section 69A of the Act in the sum of Rs 57,00,000/-. We find that the assessee had also challenged the validity of assessment on the ground that scrutiny notice under section Printed from counselvise.com ITA No. 566/AGR/2025 Amit Jain Page | 2 143(2) of the Act dated 27-8-2018 has been issued by DCIT, Central Circle, Agra who does not have jurisdiction over the assessee. 3. We have heard the rival submissions and perused the materials available on record. The return of income for the Assessment Year 2017- 18 was filed by the assessee on 31-1-2018 declaring total income of Rs 31,64,070/-. The assessee is deriving salary income from Shri Padam Jewels P Ltd apart from rental income, partners remuneration from firm M/s S N J Builders & Developers, Kailash Housing, Ashoka Hostel, capital gains and income from other sources. The case of the assessee was selected for scrutiny vide issuance of notice under section 143(2) of the Act dated 27-8-2018 by DCIT, Central Circle, Agra. It was pleaded that the assessee falls within the jurisdiction of DCIT, Circle 2(1)(1), Agra after the decentralization of the case as per the order passed under section 127(2) of the Act dated 14-5-2010. Pursuant to this, the DCIT, Central Circle, Agra does not hold any jurisdiction over the assessee to issue notice under section 143(2) of the Act dated 27-8-2018. This fact was duly intimated by the assessee before the Learned AO vide letter dated 1-9-2018 by stating that the notice issued was without jurisdiction and accordingly null and void. Again on 27-2-2019, the Learned Joint Commissioner of Income Tax (OSD), Central Circle, Agra issued notice under section 142(1) of the Act in compliance of which the assessee repeated the same facts that he is regularly assessed within the territorial jurisdiction of DCIT, Circle 2(1)(1), Agra vide letter dated 7-3-2019. After this, again the Learned Principal Commissioner of Income Tax (PCIT), Kanpur passed an order under section 127(2) of the Act dated 29-5-2019 decentralizing the case of the assessee again. The case of the assessee is that pursuant to the initial decentralization order dated 14-5-2010, the assessee’s case was never centralized and hence the second decentralization order dated 29-5-2019 Printed from counselvise.com ITA No. 566/AGR/2025 Amit Jain Page | 3 has got no meaning and is of no relevance. After this, on 28-8-2019, the Learned Income Tax Officer started the assessment proceedings and issued notice under section 142(1) of the Act which were duly complied from time to time. Ultimately the assessment was completed by the Learned Income Tax Officer, Ward 2(1)(1), Agra on 9-12-2019 under section 154 r.w.s. 143(3) of the Act determining the total income of the assessee at Rs 88,64,068/-, after making separate addition of Rs 57 lakhs on account of cash deposits during demonetization period by disbelieving the contention of the assessee that the source for the same emanated out of sale of silver (which was disclosed in Income Disclosure Scheme, 2016) for which Capital gains was duly offered by the assessee. The Learned AO while making this assessment, also treated the short term capital gains disclosed by the assessee in the return in the sum of Rs 11,21,895 to be taxed on protective basis. 4. The short point on merits is that assessee disclosed 131.442 kgs of silver bullion in Income Disclosure Scheme 2016 valued at Rs 50,86,805/-. The assessee enclosed Form No. 1 in support of this contention. The assessee duly paid the tax in Income Disclosure Scheme 2016 for the same. This silver bullion was sold during the year under consideration in various tranches , the details of which are enclosed in pages 45 to 53 comprising of computation of income from short term capital gains in cash. The assessee duly offered short term capital gains of Rs 11,21,895/- in the return. The cash generated out of sale of silver bullion stood deposited by the assessee in his bank account during the demonetization period. This source of cash deposits was ignored by the Learned AO and separate addition of Rs 57 lakhs was made on account of unexplained cash deposit during demonetization period. The Learned AO disbelieved the contention of the assessee that assessee is not engaged in the Printed from counselvise.com ITA No. 566/AGR/2025 Amit Jain Page | 4 business of trading of silver bullion and hence his contention that he had sold silver bullion cannot be believed. Accordingly, the short term capital gains of Rs 11,21,895/- offered by the assessee in the return was taxed on protective basis by the Learned AO while completing the assessment. This addition was upheld by the Learned CITA. 5. We find that action of the lower authorities in disbelieving the source of cash deposits is not in order. We find that the assessee had duly disclosed the sale of silver bullion in several tranches and had offered short term capital gains of Rs 11,21,895/-. There is absolutely no reason for disbelieving the same. We find that the assessee had given proof of holding of silver bullion of 131.442 kgs by disclosing the same under Income Disclosure Scheme, 2016 and paid due taxes thereon. Form No.1 filed by the assessee in that regard is staring on us. This silver bullion is sold and cash generated out of it is deposited in the bank account of the assessee. In our considered opinion, the explanation offered by the assessee is found to be reasonable and requires to be believed. There is no need for an individual holding silver bullion to always be engaged in the trading of bullion, in order to effectuate a sale thereon. This perception of the revenue to disbelieve the contention of the assessee is totally flawed. Hence we hold that the entire cash deposits made during the demonetization period in the sum of Rs 57 lakhs stood properly explained and no addition is required to be made thereon. Consequentially the short term capital gains offered by the assessee in the return of Rs 11,21,895/- need to be taxed on substantive basis. We order accordingly. 6. Since the relief is granted to the assessee on merits of the addition, the various technical issues raised by the assessee challenging the assumption of jurisdiction need not be gone into and they are left open. Printed from counselvise.com ITA No. 566/AGR/2025 Amit Jain Page | 5 7. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 27/03/2026. -Sd/- -Sd/- (SUNIL KUMAR SINGH) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 27/03/2026 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi Printed from counselvise.com "