ANIL YADAV,GURGAON V. ITO,WARD-1(2), GURGAON

ITA 3523/DEL/2024

AI Insights

The case revolves around an appeal by Anil Yadav against the order of the Commissioner of Income Tax (Appeals), which confirmed the addition of Rs.30,00,000 to the assessee's income for the assessment year 2017-18. This amount was deposited in the assessee's bank account during the demonetization period in India. The assessee explained that this deposit was part of a loan repayment received from Devender Yadav, which was initially disputed but later settled in Lok Adalat. The Tribunal found the assessee's explanation plausible and consistent with the partial acceptance of another deposit from the same source, leading to the allowance of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298857 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961, Negotiable Instruments Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH TIWARI
• Assessee Lawyers: ARPIT GOYAL; CHARTERED ACCOUNTANT
• Keywords: Set aside
• Section: 69A

Judgement Text

"आयकर अपीलीय अिधकरण िदʟी पीठ “एस एम सी”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं.3523/िदʟी/2024 (िन.व. 2017-18) ITA No.3523/DEL/2024 (A.Y.2017-18) Anil Yadav, H. No. 33/2, Hari Nagar, Gurgaon, Haryana 122001 PAN: ABGPY-0733-P ...... अपीलाथᱮ/Appellant बनाम Vs. Income Tax Officer, Ward-1(2) Gurugram, Haryana ..... ᮧितवादी/Respondent अपीलाथŎ Ȫारा/ Appellant by : Shri Arpit Goyal, Chartered Accountant ŮितवादीȪारा/Respondent by : Shri Rajesh Tiwari, Sr. DR सुनवाई कᳱ ितिथ/ Date of hearing : 11/12/2024 घोषणा कᳱ ितिथ/ Date of pronouncement : : 28/02/2025 आदेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as 'the CIT(A)') dated 18.11.2021, for assessment year 2017-18. 2. The appeal by assessee is against confirming of addition of Rs.30,00,000/- u/s. 69A of the Income Tax Act,1961(hereinafter referred to as ‘the Act’) by the CIT(A). 3. The assessee during the period of demonetization had deposited Rs.4,00,000 in his State Bank of India bank account on 10.11.2016 and Rs.30,00,000/- was deposited on 23.11.2016. The Assessing Officer accepted the explanation of 2 ITA No.3523/Del/2024 (AY 2017-18) assessee with respect to Rs.4,00,000/- and rejected the explanation furnished by the assesee with regard to deposit of Rs.30,00,000/-. The assessee explained the source of cash deposit as repayment of loan by one Devender Yadav. 4. Shri Arpit Goyal, appearing on behalf of the assessee submits that the assessee had extended loan of Rs.44,00,000/- to Devender Yadav in the year 2014 and had obtained five post dated cheques for repayment of loan. The cheques given by Devender Yadav were dishonored by the bank due to insufficient funds. The assessee filed complaint u/s. 138 of the Negotiable Instruments Act in the court of Judicial Magistrate I Class, Gurgaon against dishonor of cheques. Out of Rs.44,00,000/- Devender Yadav paid Rs4,00,000/- on 27.05.2016 and committed to pay next installment of Rs.8,00,000/- on04.07.2016 before the court. Thereafter, the court proceedings were adjourned twice; finally dispute was settled between the parties in the Lok Adalat, wherein, Devender Yadav in full and final settlement of his liability paid Rs.38,00,000/- on 04.08.2016. After receipt of amount the assessee was holding the cash for investment in agricultural land. Due to various reasons the assessee could not find suitable agricultural land for investment. The assessee was holding the cash when the demonetization was announced. The assessee deposited the amount i.e. Rs.30,00,000/- he was holding for investment in land. 5. Shri Rajesh Tiwari, representing the department vehemently defended the impugned order and prayed for dismissing appeal of the assessee. The ld. DR submits that the explanation given by the assessee regarding the source of cash deposits is an afterthought, hence, should not be accepted. 3 ITA No.3523/Del/2024 (AY 2017-18) 6. Both sides heard, orders of the authorities below examined. The assessee had deposited Rs. 34,00,000/- during the period of demonetization in his saving bank account. The assessee gave detailed explanation regarding the source of cash deposits. The assessee has allegedly received Rs.38,00,000/- from Devender Yadav to whom loan of Rs.44,00,000/- was extended by the assessee in 2014. Purportedly, post dated cheques issued by Devender Yadav for repayment were dishonored due to insufficient funds. The assessee filed complaint u/s. 138 of Negotiable Instruments Act in the court of Judicial Magistrate First Class, Gurgaon for the recovery aforesaid amount. Ostensibly, the dispute was settled between the assessee and Devender Yadav in Lok Adalat and in discharge of full and final settlement Rs.38,00,000/- was received in cash by the assessee on 04.08.2016. The contention of the assessee is that the cash deposited in bank account was from the amount received in full and final settlement of assessee’s claim from the Devender Yadav. In so far as the time gap between the receipt of amount in the month of August and deposit in the month of November 2016 the assessee has explained that the assessee was holding the cash for investment in agricultural land. Considering entire facts of the case, I am of the view that the explanation furnished by the assessee regarding the source of cash deposit and holding the cash is plausible. The Revenue has accepted deposit of Rs.4,00,000/- from the same source from where the remaining Rs.30,00,000/- was deposited. Therefore, the fact of dispute between Devender Yadav and assessee has been accepted by the Department. Once the source of cash in part has been accepted, I find no impediment in accepting the source of remaining amount when the source of remaining cash deposited is the same. In the facts of case, I accept the source of cash deposits by the assessee. 4 ITA No.3523/Del/2024 (AY 2017-18) 7. In the result, impugned order is set aside and appeal of the assessee is allowed. Order pronounced in the open court on Friday the 28th day February, 2025. Sd/- Sd/- (VIKAS AWASTHY) ᭠याियक सद᭭य/JUDICIAL MEMBER िदʟी/Delhi, ᳰदनांक/Dated 28.02.2025 NV/- ᮧितिलिप अᮕेिषतCopy of the Order forwarded to : 1. अपीलाथᱮ/The Appellant , 2. ᮧितवादी/ The Respondent. 3. The PCIT/CIT(A) 4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी 5. गाडᭅ फाइल/Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, DELHI "