LAVEENA JAIN,MEERUT V. ITO WARD 1(1)(4), MEERUT

ITA 5163/DEL/2025

AI Insights

The case involves Laveena Jain, the appellant, contesting the orders of the Income Tax Officer and the National Faceless Appeal Centre, which had added substantial amounts to her income for the assessment year 2017-18. The additions were based on alleged discrepancies in reported agricultural income and unexplained cash deposits during the demonetization period. The Tribunal examined the revisions made to the agricultural income and the explanations provided for the cash deposits, ultimately finding in favor of the appellant by accepting the revised figures and dismissing the additions made by the lower authorities.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 786937 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 25-08-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revised return; Unexplained cash credit; Income from undisclosed sources
• Section: 143(3); 142(1); 68; 139(5)

Judgement Text

"1 ITA No. 5163/Del/2025 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”: NEW DELHI Ms. MADHUMITA ROY, JUDICIAL MEMBER ITA No. 5163/DEL/2025 Assessment Year: 2017-18 Laveena Jain, A-122, Defence Colony, Mawana Road, Meerut. PAN: ABQPJ 3045 D Vs Income Tax Officer, Ward 1(1)(4), Meerut. APPELLANT RESPONDENT Assessee represented by Shri P.P. Narang, Adv. & Shri R.K. Jain Adv. Department represented by Sh. Manoj Kumar, Sr. DR Date of hearing 06.11.2025 Date of pronouncement 21.11.2025 O R D E R PER Ms. MADHUMITA ROY, JM: The instant appeal, filed by the assessee, is directed against the order dated 28.07.2025 (DIN & Order No. ITBA/NFAC/S/250/2025-26/1078962977(1) passed by the National Faceless Appeal Centre (NFAC), Delhi, arising out of the order dated 23.12.2019 passed by the Income Tax Officer, Ward 1(1)(4), Meerut, under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), for assessment year 2017-18. 2. Facts of the case, as recorded in the assessment order are as under: Printed from counselvise.com 2 ITA No. 5163/Del/2025 “In this case, the return of income was filed by the assessee belatedly on 31.3.2018 (as the due date for filing of return in the case of the assessee was 31.7.2017) declaring income of Rs. 2,60,000/ after claiming deduction chapter under VI-A at Rs. 3,579/- plus agricultural income of Rs. 39,54,450/ Perusal of return reveals that the income of Rs. 2,63,579/- has been shown under the head \"Income from other Sources\" The case of the assessee was selected for limited scrutiny under CASS and the notice u/s 143(2) was issued on 11.8.2018 in which the reason for selection was also mentioned as under:- i. \"Agricultural income ii. Cash deposit during demonetization period\". As per information available with the department, the assessee has cash deposited in her Axis Bank Rs. 13,00,000/- during the specified period from 9.11.2016 to 30.11.2016, The initial notice u/s 142(1) of the Income Tax Act, 1961 was issued to the assessee on 11.2.2019 vide which certain queries were raised. The revised return of income was filed by the assessee on 13.2.2019 declaring income of Rs. 2,60,000/- plus agricultural income of Rs. 3,95,445/-. Notably, the revised return of income was filed after receiving the notices u/s 143(2) and 142(1) of the Income Tax Act, 1961. However, where the original return of income has been filed belatedly i.e. after the due date for filing of return, the revised return can not be filed by the assessee as per section 139(5) of the Income Tax Act, 1961. Therefore, the revised return filed by the assessee on 13.2.2019 is a non-est return. During the course of assessment proceedings, vide reply dated 19.9.2019, the assessee has submitted that there was cash in hand on 31.3.2016 of Rs. 10,40,000/-, which is already brought on record in the case for A.Y. 2016-17 scrutinized by the A.O. In this regard, it is observed that the return of income for A.Y. 2016-17 was filed by the assessee on 31.3.2018 belatedly after demonetization. It is further observed that the return for the year under consideration was also filed on the same date. The assessment for A.Y. 2016-17 was completed under scrutiny. After going through the case record of A.Y. 2016-17 it is observed that during the course of assessment proceedings there was no document filed by the assessee showing cash in hand as on 31.3.2016 at Rs. 10,40,000/-. Further, vide this office notice u/s 142(1) of the Income Tax Act, 1961, the assessee was required to submit the justification for keeping huge cash in hand of Rs. 10,40,186/- as on Printed from counselvise.com 3 ITA No. 5163/Del/2025 31.3.2016 while there was a debit balance of Rs. 24,95,294/- in her Kisan Credit Card account of Axis Bank as on 1.4.2016, on which the interest of Rs. 2,85,428/- was charged by the bank, No justification in this regard has been submitted by the assessee except the submission that she is not claiming any amount paid towards interest, vide her reply dated 19.9.2019. In this regard vide this office notice u/s 142(1) of the Income Tax Act, 1961 dated 15.10.2019, the assessee was required to show cause as to why the cash deposited by her in bank account during demonetization period amounting to Rs. 13,00,000/- should not be treated as her income from undisclosed sources. In response to the notice dated 15.10.2019 the assessee vide her reply dated 30.10.2019 has submitted that the returns of both the assessment years i.e. 2016-17 and 2017-18 were filed together to explain the cash deposit during demonetization period. The assessee has further submitted that the return for A.Y. 2016-17 was accepted u/s 143(3) after making due inquiry, copy of bank statement was placed on record wherefrom a sum of Rs. 10,00,000/- on 21.6.2014 was withdrawn from Axis Bank, Hapur, which is actually a carried forward cash in hand of A.Y. 2016-17 obviously brought forward for A.Y. 2017-18. On going through the above mentioned reply a new version of the assessee came into the fore that she has deposited Rs. 13,00,000/- during the year under. consideration out of the cash withdrawn by her on 21.6.2014 at Rs. 10,00,000/- from her Axis Bank account. Perusal of case records reveals that during the course of assessment proceeding at none of the earlier juncture the assessee has submitted this claim. More interestingly, the assessee claimed that she kept the cash withdrawn on 21.6.2014 in hand for about two years and five months. The copies of assessee's all the bank accounts from 1.4.2014 to 31.3.2017 has also been perused and it is noticed that after 21.6.2014, the assessee has cash deposited Rs. 4,33,000/- in her Kisan Credit Card Account from 2.11.2015 to 24.10.2016. Further no justification for allegedly keeping the huge cash in hand despite the fact that there was debit balance as on 1.4.2016 of Rs. 24,95,294/- in her Credit Card Account, on which the bank charged interest of Rs. 2,85,428/-. The assessee has also tried to misguide the department by furnishing wrong facts that the amount of cash in hand as on 31.3.2016 is already brought on record viz-a- viz the case for A.Y. 2016-17. In fact, there was no such facts brought on record during the course of assessment proceedings for A.Y. 2016-17. Printed from counselvise.com 4 ITA No. 5163/Del/2025 Therefore, in view of above, it is clear that the assessee failed to submit any satisfactory explanation with regard to source of the amount of cash deposited of Rs. 13,00,000/- during demonetization period in her Axis Bank. Therefore, it is proved that the assessee is found as owner of amount of Rs. 13,00,000/- for which no satisfactory explanation has been offered by her. Hence, this amount of Rs. 13,00,000/- being treated as assessee's income from undisclosed sources and added to her income u/s 69A of the Income Tax Act, 1961 on which the tax shall be charged as per provisions of section 115BBE of the Income Tax Act, 1961, (Addition of Rs. 13,00,000/-) Further, during the course of assessment proceedings, in the written submission dated 15.2.2019 (wrongly mentioned as 15.9.2019 in the notice u/s 142(1) dated 15.10.2019) it has been stated by the assessee that actual agricultural income is Rs. 3,95,445/- which inadvertently has been reported as Rs. 39,54,450/- in the original return of income. In this regard, it is observed that during two receding years and one succeeding year the agricultural income has been shown by the assessee as under :- 2015-16 1,00,000/- 2016-17 1,30,892/- 2018-19 1,13,274/- Perusal of above details reveals that the agricultural income shown during the year under consideration is much higher than the income shown during two preceding years and one succeeding year. Without prejudice to the above, even if for the sake of example the income of Rs. 3,95,445/- has been taken as agricultural income of the year under consideration, the same is around three times of the figures of immediately preceding year i.e. A.Y. 2016-17 and also more higher than the figures of immediate succeeding year i.e. A.Y. 2018-19. In this regard vide this office notice u/s 142(1) of the Income Tax Act, 1961 dated 15.10.2019 the assessee was required to show cause as to why agricultural income for the year under consideration should not be treated at Rs. 1,54,450/-instead of the income of Rs. 39,54,450/- shown in the original return of income and the difference of Rs. 38,00,000/- should not be treated as her income from undisclosed sources. Printed from counselvise.com 5 ITA No. 5163/Del/2025 In response to the notice dated 15.10.2019, the assessee vide her reply dated 30.10.2019 has admitted the above figures of agricultural income in the above mentioned assessment years. The reason for steep and sudden rise in the agricultural income has been given by the assessee that during the year under reference there was good crop due to good monsoon and other climate reason. Perusal of the assessee's reply reveals no justification of such a huge agricultural income. In fact, the assessee has submitted such a higher figure of agricultural income in her original return of income to cover up the amount of huge cash deposited in her bank account during demonetization period. The assessee's version to substantiate huge agricultural income that this year there was good monsoon and other climate reason, is not acceptable in view of the fact that three times agricultural income cannot be derived in comparison to preceding year, from any type of good monsoon. Therefore, in view of above, it is clear that the assessee failed to substantiate the amount of agricultural income shown by her in original return of income. Therefore the agricultural income of the assessee for the year under consideration being treated at Rs. 1,54,450/- instead of the income of Rs. 39,54,450/- and the difference of Rs. 38,00,000/- is treated as income from undisclosed sources. However, in the interest of justice the credit of amount of Rs. 13,00,000/-, the addition made in the earlier part of this order out of cash deposited by the assessee in her bank account, is deducted out of the difference of Rs. 38,00,000/- treated as income from undisclosed sources. Hence, the balance amount of Rs. 25,00,000/- is added to the income of the assessee u/s 68 of the Income Tax Act, 1961 as unexplained cash credit, on which the tax shall be charged as per provisions of section 115BBE of the Income Tax Act, 1961. (Addition of Rs. 25,00,000/-)” 2.1 Accordingly, the Assessing Officer completed the assessment at an income of Rs. 40,60,000/- plus agricultural income of Rs. 1,54,450/- by adding Rs. 13,00,000/- u/s 69A as income from undisclosed sources; and of Rs. 25,00,000/- u/s 68 as unexplained cash credit read with section 115BBE of the Act to the returned income of Rs. 2,60,000/-. In appeal the Learned First Appellate Authority Printed from counselvise.com 6 ITA No. 5163/Del/2025 affirmed the action of the Assessing Officer. Aggrieved, the assessee is in appeal before this Bench. 3. Learned counsel appearing on behalf of the assessee submitted before the Bench that for A.Y. 2017-18 the assessee filed her return of income declaring income of Rs. 2,60,000/-. The actual agricultural income earned during the year was Rs. 3,95,445/-. However, inadvertently in the return one more ‘0’ was added after the above agricultural income which ultimately raised at Rs. 39,54,570/-. The assessee filed revised return of income on 13.02.2019 rectifying the error, which fact was duly explained before the authorities below and particularly before the Assessing Officer vide letter dated 13.02.2019 appearing at page 27 of the paper book filed before the Bench. Before the Bench the assessee filed an affidavit to this effect. It was submitted that agricultural income be taken as Rs. 3,95,445/- instead of Rs. 39,54,450/-. Affidavit to this effect was sworn by one Shri Bharat Bhardwaj, which is repetition of the assessee’s agricultural income for last ten years. In view of these facts and revised return the Bench do not find any reason to not accept the same, which fact has also not been disputed by the Learned DR. Hence considering the peculiar facts of the present case we allow this ground by deleting the addition made by the Learned AO on account of agricultural income wrongly mentioned in the original return of income which was subsequently rectified in the revised return of income. Ground is allowed. Printed from counselvise.com 7 ITA No. 5163/Del/2025 4. Ground No. 2: With regard to cash deposits of Rs. 13,00,000/- during demonetization the stand of the assessee is this that there was cash in hand of Rs. 10,40,000/- as on 31.03.2016. It was also submitted that returns for A.Yrs. 2016-17 and 2017-18 were filed together to explain the cash deposit during demonetization period and that the return for A.Y. 2016-17 was accepted under Section 143(3) after making due inquiry. A copy of bank statement was also placed on record wherefrom it appears that on 21.6.2014 an amount of Rs. 10,00,000/- was withdrawn from Axis Bank, Hapur. Ld. Counsel for the assessee submitted that source of cash deposit of Rs. 13,00,000/- having been duly explained before the authorities below they were not justified in making and upholding the impugned addition. Ld. Counsel prayed for deletion of the impugned addition. The Ld. DR on the other hand supported the orders of the authorities below. 4.1 Having heard the rival submissions the Bench finds that the assessee had duly explained of depositing Rs. 13,00,000/- in the bank A/c during the year under consideration out of the cash withdrawn of Rs. 10,00,000/- on 21.06.2014 from her Axis Bank A/c. She further claimed that cash withdrawal on 21.06.2014 was kept in hand for about 2 years and 5 months. In support of the same the assessee duly submitted bank details particularly of bank a/c from 1.4.2014 to 31.03.2017. It was found that the assessee kept debit balance as on 1.4.2016 of Rs. 24,95,294/- in her credit card A/c. Under these circumstances of the matter, the Revenue first, not Printed from counselvise.com 8 ITA No. 5163/Del/2025 accepted the cash deposits of Rs. 13,00,000/- made by the assessee out of cash withdrawal of Rs. 10 lakh from her Axis Bank A/c as the assessee had not submitted the claim at the initial stage. Secondly, the Revenue has raised the issue on the justification of keeping the cash in hand of Rs. 10 lakhs as withdrawal on 21.06.2014 for about two years and five months keeping in view the debit balance as on 1.4.2014 of Rs. 24,95,294/- in her Credit Bank A/c. In my considered opinion the Revenue ought not to have denied the claim of the assessee on the premise that the assessee out of her bank withdrawal of Rs. 10 lakh, the impugned Rs. 13,00,000/- were deposited. Neither it could be questioned by the Revenue as to why said sum was kept with the assessee for about two years and five months. It is the assessee’s prerogative to keep the money either with her or in the bank account or somewhere else at this stage. The Revenue does not have any authority to question the wisdom and choice of the assessee so far as the financial aspects of assessee is concerned. There could be many reasons for keeping the cash in hand which was withdrawn earlier for a longer period or keeping huge debit balance in the Credit Card A/c of the assessee. The Revenue is supposed to find the fault in quantification of the amount and not the choice of the assessee in keeping the money either in hand or keeping in Bank A/c. Finding fault on the wisdom of the assessee in maintaining the financials of the assessee is not the cup and tea of the Revenue and thus, on the basis of surmises and conjectures the addition made in Printed from counselvise.com 9 ITA No. 5163/Del/2025 the hands of the assessee to the tune of Rs. 13,00,000/- is found to be over exercising of jurisdiction of the Revenue. Hence the same is deleted. 5. Ground No. 3: As regards addition of Rs. 25,00,000/- it is noticed that the Ld. Assessing Officer made the impugned addition on account of difference between the alleged agricultural income returned by the assessee at Rs. 39,54,450/- and the agricultural income as estimated by the AO at Rs. 1,54,450/- and further by giving credit of Rs. 13,00,000/- (addition made on account of cash deposits) i.e. [Rs. 39,54,450/- minus (Rs. 1,54,450/- plus Rs. 13,00,000/-) as unexplained cash credit read with section 115BBE of the Income Tax Act, 1961. In earlier part of this order we have taken the agricultural income of the assessee at Rs. 3,95,445/-, the impugned addition made by the AO and sustained by the First Appellate Authority, therefore, does not survive and stands deleted accordingly. 6. In the result assessee’s appeal is allowed. Order pronounced in open court on 21.11.2025. Sd/- (Ms. MADHUMITA ROY) JUDICIAL MEMBER *MP* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Printed from counselvise.com "