MADAM GOPAL AGARWAL,DELHI V. ITO WARD 1(4), GHAZIABAD

ITA 735/DEL/2019

AI Insights

The case revolves around an appeal by Shri Madan Gopal Agarwal against the order of the Commissioner of Income Tax (Appeals), Ghaziabad, which confirmed the addition of \\u20b992,45,000/- to the assessee's income for the Assessment Year 2015-16. This addition was initially made by the Assessing Officer under section 143(3) of the Income-tax Act, 1961, treating the cash deposits in the assessee's bank account as unexplained investments under section 69 read with section 115BBE of the Act. The Tribunal examined the detailed explanations and documents provided by the assessee, including a cash book, rent agreements, and bank statements, and found that the assessee had sufficiently demonstrated the sources of the cash deposits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714733 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2015-2016
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARPREET KAUR HANSRA
• Assessee Lawyers: RANO JAIN
• Keywords: Business income; Unexplained investment
• Section: 143(3); 69

Judgement Text

"Page | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F”: NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No. 735/Del/2019 (Assessment Year: 2015-16) Shri Madan Gopal Agarwal, 159, Bank Enclave, Laxmi Nagar, Delhi Vs. ITO, Ward-1(4), Ghaziabad (Appellant) (Respondent) PAN: AGZPA3971D Assessee by : Ms. Rano Jain, Adv Ms. Mansi Jain, Adv Shri Ramesh Kumar, Adv Revenue by: Ms. Harpreet Kaur Hansra, Sr. DR Date of Hearing 05/08/2025 Date of pronouncement 08/08/2025 O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.735/Del/2019 for AY 2015-16, arise out of the order of the Commissioner of Income Tax (Appeals), Ghaziabad [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No. 360576021100118 dated 31.12.2018 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 27.12.2017 by the Assessing Officer, ITO, Ward-1(4), Ghaziabad (hereinafter referred to as ‘ld. AO’). 2. The only issue to be decided in this appeal is as to whether the ld CITA was justified in confirming the addition of ₹92,45,000/- made on account of cash deposits made in the bank u/s 69 read with section 115BBE of the Act in the facts and circumstances of the instant case. Printed from counselvise.com ITA No. 735/Del/2019 Shri Madan Gopal Agarwal Page | 2 3. We have heard the rival submissions and perused the material available on record. The return of income for assessment year 2015-16 was filed by the assessee on 20.02.2017 declaring total income of ₹9,60,190/- comprising of the following: – A Income from business 5,29,750/- B. Income from other sources 5,90,437/- Total 11,20,187/- Less: Deductions under Chapter VIA 1,60,000/- Total 9,60,190/- Business income comprises of the following :- a. Income from Bhatta rent 66,00,000/- b. Miscellaneous receipts 21,875/- Total - (A) 66,21,875/- Expenses on interest paid on loan 50,36,086/- Salary and wages 18,30,000/- Daily expenses 10,122/- Bank charges 2,15,917/- Total - (B) 60,92,125/- Net profit (A)-(B) 5,29,750/- 4. The assessee made the cash deposit of ₹92,45,000/- during the year under consideration in his saving banks account maintained with State Bank of Patiala, Laxmi Nagar, Delhi. Assessee was asked to explain the source of cash deposit. The assessee explained that the cash deposits were made on various dates during the year under consideration out of Bhatta rent received in cash in the sum of ₹5,50,000/- per month and the cash withdrawals made during the year from the Bank account from time to time. The assessee also filed the Printed from counselvise.com ITA No. 735/Del/2019 Shri Madan Gopal Agarwal Page | 3 complete copy of cash book for the period 01.04.2014 to 31.03.2015, which is also enclosed in Pages 33 to 35 of the paper book filed before us. The assessee also justified the genuineness of the receipts of bhatta rent by furnishing the rent agreement dated 01.11.2013 to 30.09.2014 and for the period 01.10.2014 to 31.08.2015. These rental agreements enclosed in pages 36 to 40 of the paper book. Apart from this, the assessee filed a complete ledger account of bhatta receipts, interest receipts on loans, interest paid on loans, details of capital account, loan taken from Cholamandalam, loan statement and bank statement along with audited books of account. The ld AO did not heed to the contentions of the assessee and proceeded to treat the cash deposit made in the bank account in the sum of ₹92,45,000/- as unexplained investment u/s 69 read with section 115BBE of the Act and completed the assessment. This action was upheld by the ld CIT(A). 5. It is not in dispute that the assessee had indeed furnished the cashbook for the whole financial year 2014-15, relevant to assessment year 2015-16. On perusal of the said cashbook enclosed in pages 33 to 35 of the paper book, we find that there is absolutely no negative cash balance, even on a single day with the assessee. On several dates of cash deposits made in the bank account, the assessee indeed had sufficient cash balance in its kitty either out of opening balance of ₹36,18,454/-; or out of bhatta rent of ₹5,50,000 per month or out of miscellaneous receipts or out of cash withdrawals. It is the onus cast on the revenue to prove that cash withdrawal and other cash receipts of the assessee were already spent by the assessee for his business or personal purposes, and that the same is not available as a source to explain the cash deposit made in the bank account. This onus has not been discharged by the revenue in the instant case. Printed from counselvise.com ITA No. 735/Del/2019 Shri Madan Gopal Agarwal Page | 4 6. In view of the said observations, we hold that assessee had duly explained the sources of cash deposits made in the bank account in the sum of ₹92,45,000/- and no part of it could be treated as unexplained warranting any addition u/s 69, read with section 115BBE of the Act. Accordingly, the grounds raised by the assessee are hereby allowed. 7. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 08/08/2025. -Sd/- -Sd/- (VIMAL KUMAR) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:08/08/2025 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi Printed from counselvise.com "