DEEPAK KUMAR AGARWAL,MORADABAD V. ITO,WARD-2(1), NEW DELHI

ITA 2597/DEL/2024

AI Insights

The case revolves around an appeal by Deepak Kumar Agarwal against the order of the Commissioner of Income Tax (Appeals) which confirmed the addition of Rs. 1,00,26,500 as unexplained cash deposit under section 69A of the Income Tax Act, 1961. The Assessee argued that the additions were based on presumptions and not on concrete evidence, as the withdrawals and deposits were duly recorded in the books of accounts and were subject to tax audit. The Departmental Representative contended that the Assessee failed to provide a satisfactory explanation for the large withdrawals and the source of the deposits. The Tribunal, after reviewing the evidence, sided with the Assessee, highlighting the lack of material from the Revenue to substantiate their claims.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 398291 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POOJA SWAROOP
• Assessee Lawyers: NEERAJ JAIN; IP. K
• Section: 143(3)

Judgement Text

" 1 ITA No. 480/Del/2025 Eagle Hunter Solutions Ltd. Vs. CIT(A) IN THE INCOME TAX APPELLATE TRIBUNAL DELHI (DELHI BENCH ‘B’ NEW DELHI) BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SH. YOGESH KUMAR U.S., JUDICIAL MEMBER ITA No. 2597/Del/2024 (A.Y 2017-18) Deepak Kumar Agarwal Z-13, DeenDayal Nagar, Phase-2, MDA, Moradabad, Uttar Pradesh PAN: AFGPK4836D Vs ITO Ward-2(1) New Delhi Appellant Respondent Assessee by Shri Neeraj Jain, CA and Sh. iP. K. Mishra, CA Revenue by Ms. PoojaSwaroop, CIT(DR) Date of Hearing 13/05/2025 Date of Pronouncement 04/06/2025 ORDER PER YOGESH KUMAR, U.S. JM: The present appeal is filed by the Assessee against the order of the Commissioner of Income Tax (Appeal)/National Faceless Appeal Centre (‘Ld. CIT(A)’/NFAC for short) dated 12/04/2024 pertaining to the Assessment Year 2017-18. 2. Grounds taken in this appeal are as under: “1. That the order of learned Commissioner of Income Tax (Appeals) is bad in law as well as on the facts and in the circumstances of the case. 2. That the learned Commissioner of Income Tax (Appeals), has erred in confirming the addition on account of unexplained cash 2 ITA No. 480/Del/2025 Eagle Hunter Solutions Ltd. Vs. CIT(A) deposited to the extent of Rs. 1,00,26,500/- u/s 69A of the Act on the basis of presumptions and surmises and without considering the evidences and explanations given by the appellant. 3. That the learned Commissioner of Income Tax (Appeals), has erred in considering the invocation of section 115BBE as consequential ground. 4. The above grounds of appeal are without prejudice to each other. 5. The Appellant craves leave to add, alter, amend and/or modify the above grounds of appeal.” 3. Brief facts of the case are that,the Assessee filed return of income declared total income of Rs. 7,85,890/-. The case of the Assessee was selected for limited scrutiny, an assessment order came to be passed u/s 143(3) of the Income Tax Act, 1961 ('Act' for short) on 22/12/2019 by making addition u/s 69A of the Act on account of excess credit in bank account of Rs. 2,62,73,508/- and another addition u/s 69A of the Act on account of cash deposited during the demonetization period, Rs. 23,04,500/- and also disallowed deduction under Chapter VIA of Rs. 1,50,481/-. 4. Aggrieved by the assessment order dated 22/12/2019, the Assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 12/04/2024, confirmed the addition made on account of unexplained cash deposit to an extent of Rs. 1,00,26,500/- made by the 3 ITA No. 480/Del/2025 Eagle Hunter Solutions Ltd. Vs. CIT(A) A.O. u/s 69A of the Act. Aggrieved by the order of the Ld. CIT(A), the Assessee preferred the present Appeal. 5. The Ld. Assessee's Representative addressing on the grounds of Appeal submitted that the books of the Assessee are subject to tax audit and the tax audit along with balance sheet were duly produced before the A.O. during the remand proceedings. The bank account of the Assessee reflects that the Assessee had withdrawn Rs. 1,00,26,500/- from his bank account and cash book has been examined by the A.O. The withdrawals and the deposits are duly recorded in the books of accounts, however, the Revenue authorities without bringing any material on record to show that the cash deposited in the bank account is not out of the cash withdrawn and without establishing the fact that such withdrawn cash has been used for any other purpose, erroneously addition has been made by the A.O. which has been confirmed by the Ld. CIT(A). Thus, sought for deleting the addition. 6. Per contra, the Ld. Departmental Representative submitted that the Assessee has not provided any explanation regarding huge withdrawals, the Assessee has not provided any cogent reason with evidence regarding the source of deposit. Thus, relying on the findings of the Ld. CIT(A), the Ld. Departmental Representative sought for dismissal of the Appeal. 4 ITA No. 480/Del/2025 Eagle Hunter Solutions Ltd. Vs. CIT(A) 7. We have heard both the parties and perused the material available on record. The only reason for the Ld. CIT(A) to sustain the addition that the Assessee has not provided any explanation regarding the huge cash withdrawals and not provided any cash explanation with evidence regarding the source of such deposits. It is not in dispute that books of the Assessee are subject to tax audit, the Assessee has placed the Audit Report along with balance sheet at Page no. 222 to 232 of the Paper Book which has been produced before the A.O. The bank account of the Assessee is a regular bank account, wherein the Assessee has withdrawn Rs. 1,00,26,500/- which can be corroborated from the bank statement starting from 02/04/2016 to 31/03/2017 and the Department has not disputed the said fact. The Revenue neither brought any material on record to show that the cash deposited in the bank account is not out of the cash withdrawn and nor brought any evidence to show that the cash withdrawal made by the Assessee has been used for any other purpose. Considering the above facts and circumstances, we find no reason to sustain the addition made by the A.O. which has been confirmed by the Ld. CIT(A). Finding merits in the Grounds of appeal of the Assessee, the impugned addition sustained by the Ld. CIT(A) is hereby deleted. 5 ITA No. 480/Del/2025 Eagle Hunter Solutions Ltd. Vs. CIT(A) 8. In the result, the Appeal of the Assessee is allowed. Order pronounced in the open court on 04th June, 2025 Sd/- Sd/- (M. BALAGANESH) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date: 04.06.2025 R.N, Sr.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "