DEVENDRA SINGH CHEEMA,NAINITAL V. ITO, WARD-2(3)(1), NAINITAL

ITA 1/DDN/2024

AI Insights

The case involves Devendra Singh Cheema, who appealed against the order of the National Faceless Appeal Centre (NFAC), which confirmed the addition of Rs. 2,55,000 to his income as unexplained cash credit under section 68 of the Income-tax Act, 1961. The assessee had declared this amount as rental income from a shop in Mohali, which was initially treated as agricultural income. The Assessing Officer (AO) and the CIT(A) both disbelieved the assessee's explanation regarding the nature and source of this income, leading to the addition under section 68. The Tribunal, after hearing the arguments and reviewing the materials, upheld the lower authorities' decisions due to the lack of sufficient documentary evidence to substantiate the claim of rental income.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 46841 (ITAT-DEHRADUN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2020-2021
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMAR PAL SINGH
• Assessee Lawyers: P AVAN KUMAR NATH
• Keywords: Unexplained cash credit; FORM 26AS
• Section: 143(3); 68

Judgement Text

"Page | 1 THE INCOME TAX APPELLATE TRIBUNAL DEHRADUN BENCH “SMC”, NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER (Through Video Conferencing) ITA No. 01/DDN/2024 (Assessment Year: 2020-21) Devendra Singh Cheema, Bisht Bhawan Compound, Tallital, Nainital, Uttarakhand Vs. ITO, Ward-2(3)(1), Nainital (Appellant) (Respondent) PAN: ADUPC2094D Assessee by : Shri Pavan Kumar Nath, Adv Revenue by: Shri Amar Pal Singh, Sr. DR Date of Hearing 20/03/2025 Date of pronouncement 09/04/2025 O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in ITA No. 1/DDN /2024 for AY 2020-21, arises out of the order of the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. NFAC’, in short] dated 30.03.2023 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 20.10.2022 by the Assessing Officer, NFAC, Delhi (hereinafter referred to as ‘ld. AO’). 2. At the outset we find that there is delay in filing the appeal by 275 days by the assessee. Considering the reasons adduced in the delay condonation petition and in the interest of substantial justice, the delay is hereby condoned and appeal of the assessee is admitted for adjudication. ITA No. 01/DDN/2024 Devendra Singh Cheema Page | 2 3. The only effective issue to be decided in this appeal is as to whether the ld CIT(A) was justified in confirming the addition of Rs. 2,55,000/- made by the ld AO u/s 68 of the Act in the facts and circumstances of the instant case. 4. We have heard the rival submissions and perused the materials available on record. The assessee is an individual and had filed his return of income for AY 2020-21 on 13.10.2021 declaring total income of Rs. 10,63,790/-. The assessee during the year under consideration had shown gross agricultural receipts of Rs. 37,75,498/- and net agricultural income of Rs. 25,57,697/-. The assessee submitted the entire cash flow statement for the whole financial year 2019-20 along with letter dated 22.01.2022 together with all the bank accounts including the agricultural accounts. The assessee submitted that he has not maintained proper books of account and hence the total credits in the bank account were treated as gross agricultural income as he is merely an agriculturist. The assessee also furnished details of crops grown on the agricultural land proving the agricultural activities. The assessee furnished the name of the person from whom the agricultural income has been received by him together with their PAN and address. The ld AO observed that assessee had received an amount of Rs. 85,000/- each on three dates totaling to Rs. 2,55,000/- which has been described as rental income from shop at Mohali mistakenly treated as agricultural income. Since, this was offered to tax by the assessee as taxable income, the same was treated as undisclosed income as unexplained cash credit u/s 68 of the Act. The ld AO observed on verification of computation of total income of the assessee, assessee had shown rental receipt from M/s. Xperience Hospitality of Rs. 23,20,508/- which is also cross verifiable from Form 26AS of the assessee for the year under consideration. Accordingly, the ld AO disbelieved the contention of ITA No. 01/DDN/2024 Devendra Singh Cheema Page | 3 the assessee that Rs. 2,55,000/- represent rental income and since the nature and source of credit could not be properly explained, the ld AO proceeded to treat the same as unexplained cash credit u/s 68 of the Act. The ld CIT(A) observed that assessee could not justify the receipts in the bank account of Rs. 2,55,000/- to be rental income by producing the rental agreement, name of the party to whom given on rent, details of property given on rent etc. Accordingly, he upheld the addition made by the ld AO in the sum of Rs. 2,55,000/- as unexplained credit u/s 68 of the Act. Even before us , no documentary evidence was submitted by the assessee to prove the nature and source of credit thereon. Hence, we do not find any infirmity in the order of the ld CIT(A) upholding the addition in the sum of Rs. 2,55,000/- on account of unexplained cash credit u/s 68 of the Act. Accordingly, the ground raised by the assessee is dismissed. 5. In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on 09/04/2025. -Sd/- -Sd/- (SATBEER SINGH GODARA) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:09/04/2025 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi "