KAILASH CHAND VERMA ,FARIDABAD, HARYANA V. INCOME TAX OFFICER, WARD -1(4), FARIDABAD

ITA 2436/DEL/2024

AI Insights

The case involves Kailash Chand Verma, who appealed against the order of the National Faceless Appeal Centre (NFAC) and the Assessing Officer (AO), which added Rs. 59,50,000 to his income as unexplained cash deposits during the demonetization period. The assessee argued that these deposits were proceeds from the sale of agricultural land and savings accumulated by his wife over ten years. The Tribunal examined the submissions and evidence provided, including the sale deed and bank statements, and found merit in the assessee's arguments, leading to the allowance of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312928 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2017-2018
• Other Referred Cases: Girdari Lal Vs. The Income Tax Officer Ward \\u2013 1(3), Chdralekha Vashishtha Vs. ITO, Ward 50(1), Nita Taneja Vs. ITO, Ward-33, New Delhi, Sudhirbhai Praveen Kant Thaker Vs. ITO AHD
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DAYAINDER SINGH SIDHU
• Assessee Lawyers: JITENDER WADHWA
• Keywords: Unexplained investment; Salary income

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: ‘C’: NEW DELHI) BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, JUDICIAL MEMBER ITA No:-2436/Del/2024 (Assessment Years- 2017-18) Kailash Chand Verma, 1445/5, Near Shani Dev Mandir, Tigaon S.O. Tigaon (95) Faridabad Haryana 121101 Vs. ITO Ward- 1 (4) Faridabad PAN No:AKHPV5545Q APPELLANT RESPONDENT Assessee by : Sh. Jitender Wadhwa, CA Revenue by : Shri Dayainder Singh Sidhu, CIT (DR) Date of Hearing :20.03.2025 Date of Pronouncement : 30.04.2025 ORDER PER SUDHIR PAREEK, JM The aforetitled appeal arising out of the order dated 22.03.2024 passed by the National Faceless Appeal Centre (for the sake of convenience, here in after referred in short as Ld. NFAC] passed against the order dated 05.10.2019 passed by the Assessing Officer Page 2 of 10 [(for the sake of convenience, here in after referred in short as Ld. AO)] for A.Y. 2017-18. 2. The assessee has raised following grounds of appeal :- 1) That the appellant denies its liability to be assessed at total income of Rs. 61,36,300/- and accordingly denies his liability to pay tax and interest thereon. 2) That having regard to facts and circumstances of the case, the learned CIT(A) has erred in law and facts in making the addition of Rs. 59,50,000/- u/s 69 A of Income Tax Act, 1961 on account of unexplained cash deposits in the State Bank of India during demonetization period. However, this cash deposit majorly related to the proceeds from sale of agricultural land. 3) That having regard to facts and circumstances of the case, the learned CIT(A) has erred in law and facts by not considering the fact that the assessee sold agricultural land of Rs.58,12,500/- out of which he deposited Rs.58,00,000/- in his bank account, while the remaining amount of Rs.1,90,000/- was deposited from the cash accumulated by the assessee's wife over the past ten years. Page 3 of 10 4) That having regard to facts and circumstances of the case, the learned CIT(A) has erred in law by treating the whole cash deposit as an unexplained investment as mere cash deposit in bank account does not amount to escaped income. The major cash deposited is related from the proceed from the sale of agriculture land. For this matter reliance is placed on the judgment of Income Tax Appellate Tribunal Delhi Bench “B” Delhi Girdari Lal Vs. The Income Tax Officer Ward – 1(3) ( I.T. A No.1636/Del/2020) for assessment year 2011-12 on 23.05.2023. 5. That having regard to the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts in not considering the documents submitted by the assessee at the timeof filing the appeal and during the assessment proceedings. 6. That the appellant carves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other. Page 4 of 10 3. Facts of the case may be concisely described as that ,the assessee, an salaried individual , filed his return of income declaring total income of Rs 1,86,300/- as on dated 27-07-2017 Thereafter case was selected for limited scrutiny under section 143 (3) of the with the reason \"\" Large Value Cash Deposits during the year AY 2017-18\"\" . After completion of said proceedings , the Ld. AO made additions of Rs.59,50,000.00 to the total income declared by the assessee for the assessment year 2017-18 and raised a demand of Rs. 60,19,910.00. 4. Aggrieved by the order of the CIT(A), the assessee is in appeal before us. 5. Heard rival submissions and carefully scanned perused the material available on record. Reiterating the grounds of appeal, the Ld. AR submitted that the Ld. CIT(A) erroneously confirmed the addition of Rs.59,50,000/- under Section 69A of the Act on account of unexplained cash deposit in the SBI during the demonization period. However, this cash deposit majorly related to the sale of agricultural land which was not considered by the CIT(A). 7. Per contra the DR relied upon the orders passed by both the Page 5 of 10 authorities below 8. The Ld. AR further submitted that the assessee owned agricultural land situated at Ballabhgarh, Faridabad which he sold on 24.07.2015 for an amount of Rs.58,12,500/-for which has been clearly mentioned in the sale deed that the seller has received that the entire amount in cash and in support the Ld. AR drawn our attention of page No.25 of paper book in which specifically mentioned that entire amount received in cash. 7. The Ld. AR further submitted that it is also declared the long term capital gain from the said property in the return of income for the A.Y. 2016-17 and further out of that sales consideration, assessee had deposited Rs. 58 lacs in his bank account on 13.11.2016 which is evident from the perusal of the page No.12 of the paper book. It was also submitted that the assessee’s wife accumulated some cash over past 10 years out of which assessee deposited Rs.1,50,000/- in assesee’s bank account so the assessee had deposited the cash only out of the funds accumulated from declared income. Page 6 of 10 8. From the bare perusal of the assessment order, the Ld. AO mentioned that the perusal of bank statement reveals that the assessee had deposited cash amounting Rs.1,50,000/- on 12.11.2016 and Rs. 58 lacs on 13.11.2016 maintained with State Bank of India and for which assessee replied that the agricultural land sold on 24.11.2015 for the consideration of Rs. 58,12,500/-. In this regard the Ld. AO observed that there is huge gap of 17 months between amount received of sale of land and cash deposited in the bank account and explanation furnished by the assessee regarding cash deposited of Rs.59,50,000/- during demonetization period not acceptable only because the huge gap of 17 months. 9. The assessee assails above order by way of appeal and the ld. CIT(A) strangely dismissed the appeal by simply reproducing statement of facts and grounds of appeal and the Ld. CIT(A) nowhere discussed the merits of the case even the submission advanced by the assessee/ appellant before first appellate authority. 10. The Ld. AR vehemently submitted that the Ld. AO made the addition in question only because a gap of 17 months between the Page 7 of 10 amount received from the sale of land and cash deposited with the bank and while making addition in questionand ignored that the assessee is a regular return filer and cash was deposited out of the declare income only. 11. The Ld AR relied upon the order passed by the coordinate Bench in the case of Chdralekha Vashishtha Vs. ITO, Ward 50(1) in ITA No.607/Del/2023 in which held that merely because the assessee was holding big amount of cash in her in the accumulation of cash from declared income, cash rental and salary income cannot be disbelieved unless the Assessing Officer establishes that the assessee had used amount of the income accrued to her during earlier period, for some other purpose and there was no cash in hand at the time when the cash by deposited to her bank account. The Ld. AR also relied upon the order passed by the coordinate Bench in ITA No.4959/Del/2018 Nita Taneja Vs. ITO, Ward-33, New Delhi in which coordinate Bench held that income tax return, cash book maintained by the assessee have neither been rebutted over there is no any finding that case in hand disclosed in the balance sheet was beyond the scope of their income Page 8 of 10 or are not substantiated from the bank account and simply because after the period of demonetization, certain amount of cash has been deposited in the account, does not mean the case in hand as on 31.03.2015 and 31.03.2016which is duly shown in the balance sheet and discussed with the department in the respective income tax return file and earlier is unexplained likewise also relied upon the order of the coordinate Bench in ITA No.788/AHD/2012 Sudhirbhai Praveen Kant Thaker Vs. ITO AHD in which held as under :- “We find merit into the contention of the Ld. Counsel for the assessee that there is no dispute that the amount which was withdrawn by the assessee on various dates during the 2006 was available with him for making deposits. In the absence of finding that the amount which was previously withdrawn by the assessee had been utilized for any other purpose merely on the basis of conjecture that the amount might have been utilized for any other purpose and was not available with the assessee for making the deposits, we are unable to accept the reasoning of the authorities below.” Page 9 of 10 12. By perusal of the material available on record and following the judicial decisions is hereinbefore, we find material substance in the submission advanced on behalf of the assessee and are of the view that the appeal of the assessee deserves to be allowed and addition in question is deleted. 13. Consequently, the appeal of the assessee is allowed as indicated above. Order pronounced in the Open Court on 30.04.2025. SD/- SD/- (SHAMIM YAHYA) (SUDHIR PAREEK) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 30/04/2025. Neha, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Sr. Particulars Date "