LATE SHRI OM PRAKASH AGARWAL,AGRA V. DCIT, CIRCLE-2(1)(1), AGRA, AGRA

ITA 422/AGR/2024

AI Insights

The case involves an appeal by the late Shri Om Prakash Aggarwal, represented by Ms. Moon Goyal, against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The dispute centered on the addition of Rs.33 Lacs to the assessee's income under section 68 read with section 115BBE of the Income Tax Act, due to unexplained cash deposits used for advance tax payments. The Tribunal found that the assessee had provided sufficient explanation for a portion of the deposits and thus reduced the addition to Rs.5 Lacs, subjecting it to normal tax rates.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 470882 (ITAT-AGRA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Other Referred Cases: S.M.I.L.E. Microfinance Ltd. vs. ACIT (WP (MD) No.2078 of 2020 dated 19-11-2024)
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHAILENDER SHRIVASTAVA LD.
• Assessee Lawyers: SAHIB P. SATSANGI; LD
• Keywords: Business income
• Section: 143(3); 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “DB” BENCH, AGRA BEFORE HON’BLE SHRI SATBEER SINGH GODARA, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं. / ITA No.422/Agr/2024 (िनधाŊरणवषŊ / Assessment Year: 2017-18) Late Shri Om Prakash Aggarwal (rep. by LH Ms. Moon Goyal) 2/27, Seth Gali, Agra, UP 282003 बनाम/ Vs. DCIT-Circle 2(1)(1) Agra ̾थायीलेखासं./जीआइआरसं./PAN/GIR No. AAKPA-8385-Q (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Shri Sahib P.Satsangi, C.A. – Ld. AR ŮȑथŎकीओरसे/Respondent by : Shri Shailender Shrivastava – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 21-02-2025 घोषणाकीतारीख /Date of Pronouncement : 28-03-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of an order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 26-08-2024 in the matter of an assessment framed by Ld. Assessing Officer (AO) u/s 143(3) of the Act on 15-12-2019. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. 2. The assessee being resident individual was stated to be engaged in real estate business in proprietorship concern namely M/s O.P. Chains Company. The Ld. AO noted that though the assessee had closing cash balance of Rs.1.79 Lacs at the end of October, 2016, it deposited advance tax of Rs17 Lacs on 11-11-2016 and another payment of Rs.16 Lacs was made on 13-11-2016 in cash. In the absence of any satisfactory response, the amount of Rs.33 Lacs was added u/s 68 r.w.s. 115BBE. The Ld. CIT(A) confirmed the same since the assessee could not substantiate the source of cash deposit during first appeal also. Aggrieved, the assessee is in further appeal before us. 3. From assessee’s submissions during first appeal, it could be ascertained that the assessee had stated that the payment of advance tax was made out of cash / funds available with the proprietorship concern. The assessee also submitted that the opening cash in hands as on 09-11-2016 was Rs.38.34 Lacs which was sourced to deposit the advance tax. It was also submitted that the cash sales of proprietorship concern during the month of October, 2016 was Rs.330.41 Lacs which was reported in the VAT return. Considering all these facts, we would conclude that the assessee has some explained sources to deposit advance tax. Accordingly, we would hold that the addition of Rs.5 Lacs as business income would meet the end of justice considering the peculiar facts of the case. The same would be subjected to normal rate of tax since as per the decision of Hon’ble High Court of Madras (Madurai Bench) in S.M.I.L.E. Microfinance Ltd. vs. ACIT (WP (MD) No.2078 of 2020 dated 19-11-2024), the revenue is empowered to impose 60% rate of tax for the transactions from 01.04.2017 onwards and not prior to the said cut-off date. The Ld. AO is directed to re-compute the income of the assessee. 4. The appeal stand partly allowed in terms of our above order. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963. Sd/- Sd/- (SATBEER SINGH GODARA) (MANOJ KUMAR AGGARWAL) Ɋाियक सद˟ /JUDICIAL MEMBER लेखा सद˟ /ACCOUNTANT MEMBER Dated: 28-03-2025 आदेश की Ůितिलिप अŤेिषत / Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT AGRA "