Davender Singh , Haryana V. ITO Ward-1, Panipat

ITA 903/DEL/2022

AI Insights

The case involves Davender Singh, the appellant, who contested the addition of Rs. 14,24,500 to his income by the Income Tax Officer, treating it as unexplained money under section 69A of the Income Tax Act. The addition was based on cash deposits in the appellant's bank account, which the Assessing Officer and the CIT(Appeals) found unexplained. The appellant argued that as a 'Kacha Aartiya', he dealt in cash and the deposits were from cash withdrawals for business purposes. The Tribunal, after reviewing the evidence presented, concluded that the addition was unjustified and allowed the appeal.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 112816 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-12-2022
• Assessment Year: misc
• Appeal Filed On: 03-07-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 69A

Judgement Text

1 ITA no. 903/Del/2022 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”: NEW DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA No. 903/DEL/2022 Assessment Year: 2017-18 Davender Singh, Shop No. 169, Nehra Trading Company, New Grain Market, Samalkha, Panipat. PAN- EBBPS2093P Vs Income-tax Officer, Ward-1, Panipat. APPELLANT RESPONDENT Assessee represented by Shri Navin Gupta, Adv. Department represented by: Shri Sumesh Swani, Sr. DR Date of hearing 07.12.2022 Date of pronouncement 07.12.2022 O R D E R PER KUL BHARAT, JM: This appeal, by the assessee, is directed against the order of the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 23.03.2022, pertaining to the assessment year 2017-18. The assessee has raised following grounds of appeal: “1. That the order of the Ld. CIT(A) is against law and fact. 2. That the Ld. CIT(Appeals) erred in confirming the addition of Rs. 14,24,500/- made by the Ld. AO by treating the cash deposit of the appellant in his bank a/c, as unexplained money u/s 69A of the Income Tax Act. 3. That the appellant craves leave to add, alter or withdraw any of the ground of appeal at the time of hearing.” 2 ITA no. 903/Del/2022 2. Facts giving rise to the present appeal are that the assessee filed his return of income through electronic mode on 15.8.2017 declaring total income at Rs. 3,29,350/- and agricultural income of Rs. 2,14,592/-. The case was selected for limited scrutiny through CASS to examine cash deposited during the year. 3. The Assessing officer did not accept the contention of the assessee that the assessee was Kacha Aartiya and amount was deposited out of cash withdrawals from the bank account. The bank statement was also furnished before the Assessing Officer. However, the Assessing officer did not accept this contention and made addition of the sum of Rs. 14,24,500/- being the amount deposited by the assessee. Aggrieved by this the assessee carried the matter before the learned CIT(Appeals), who also sustained the addition. Now the assessee is in appeal before this Tribunal. 4. Learned counsel for the assessee vehemently argued that the authorities below were not justified in making the addition. Learned counsel submitted that the assessee is a Kacha Aartiya. The nature of his business is tht he should have cash on hand in making payment to the farmers who accept the payment in cash only. He further contended that before the authorities below all relevant evidences were placed. He took us through the cash flow statement and the bank statement. 3 ITA no. 903/Del/2022 He submitted that under the facts and circumstances of the present case the authorities below ought not to have made addition and sustain the same. 5. On the contrary, learned Sr. DR opposed the submissions and supported the orders of the authorities below. 6. I have heard the rival submissions and perused the material available on record. The learned CIT(Appeals) sustained the addition by observing as under: “8. In spite of giving enough opportunities by the AO, the appellant could not explain the source of cash deposited in his bank account during the year and his all replied that cash deposit is out of cash withdrawal made from bank account. However, as stated by the AO, the claim of the appellant that cash is deposited out of withdrawal is not tenable as cash withdrawals made from bank account were also used in making payments to farmers who sold their agriculture produce to the assessee. Therefore, only submitting that cash is deposited out of withdrawals is not justified. The contention of the appellant that the source of cash deposited to the tune of Rs.14,24,500/- cannot be accepted as the appellant has not provided date of credit of the said amount into bank account. Further, the appellant has not given the details from the concerned bank the confirmation that it has received an amount of Rs. 14,24,500/- and further the purpose of taking the credit and also it is seen that the appellant has not given any details as to why the amount was not utilized for the purpose it was taken. Further, the appellant has not provided any documentary evidence in support of expenditure. Hence, the cash deposit of Rs. 14,24,500/- into the appellant’s bank account is treated as unexplained money u/s 69A r.w.s. 115BBE by the AO which is correct.” 7. I find that the assessee had provided relevant and credible evidences in the form of cash flow statement and bank statement. That proves that the assessee was having cash on hand. The Revenue has not brought any material to rebut the 4 ITA no. 903/Del/2022 evidences. The law is well settled that addition cannot be made merely on the basis of whims and fences, when the assessee had himself brought certain evidence on record from where such cash withdrawal was made. Without bringing any evidence to the contrary, it cannot be presumed that such amount was applied for any other purpose. In the absence of such evidence I am of the considered view that the authorities below were not justified in making the addition. I, therefore, direct the Assessing Officer to delete the addition. Grounds raised in this appeal are allowed. 8. Assessee’s appeal is allowed. Order pronounced in open court during the course of hearing on 7.12. 2022. Sd/- (KUL BHARAT) JUDICIAL MEMBER *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI