NIRAJ KUMAR SINGH,DELHI V. INCOME TAX OFFICER 70(5), DELHI

ITA 5556/DEL/2025

AI Insights

The case involves Niraj Kumar Singh, the appellant, who contested the addition of Rs. 11,59,000 to his income for the assessment year 2017-18, which was treated as unexplained investment under section 69A of the Income Tax Act, 1961. The addition was initially made by the Assessing Officer (AO) following the scrutiny of cash deposits made during the demonetization period. The First Appellate Authority upheld this addition. The Tribunal, after considering the submissions and evidence, partly allowed the appeal, reducing the addition significantly but maintaining the core issue of unexplained cash deposits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 783729 (ITAT-DELHI)
• Duration Of Justice: 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 08-09-2025
• Other Referred Cases: SMILE Microfinance Ltd. vs. ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR
• Keywords: Unexplained investment
• Section: 143(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH “SMC’’ : NEW DELHI) BEFORE SHRI MAHAVIR SINGH, HON’BLE VICE PRESIDENT ITA No. 5556/Del/2025 Asstt. Year : 2017-18 NIRAJ KUMAR SINGH, vs. ITO 70(5), Delhi C-19/683, Street No. 3A, Ganesg Nagar-II, Shakarpur, New Delhi- 110 092 (PAN: CQMPS4228Q) (Appellant) (Respondent) Appellant by : None Respondent by : Shri Manoj Kumar, Sr. DR. Date of Hearing 28.10.2025 Date of Pronouncement 07.11.2025 ORDER This appeal by the assessee is emanating from the order of the Ld. Addl/JCIT(A)-1 Nasik dated 19.06.2025 on the solitary ground relating to sustaining the addition of Rs. 11,59,000/- made by the AO u/s. 69A of the Act by treating the cash deposit as unexplained investment. 2. In this case there is a delay of 8 days in filing the appeal, after perusing the records, I am of the considered view that reasonable reasons have been attributed to the assessee in filing the belated appeal, hence, I condone the same. 3. Brief facts of the case are that assessee is an individual and filed his return of income for AY 2017-18 declaring total income on Rs. 4,44,400/-. The case was selected for Limited scrutiny under CASS for the reason “cash deposit during demonetization period”. Notices were issued from time to time and duly served upon the appellant. The AO had passed order u/s. 143(3) of the Act with assessed total income of Rs. 16,03,400/- and addition of Rs. 11,59,000/- u/s. 69A of the Income Tax Act, 1961 read with section 115BBE of the Act was added in the hands of the assessee. However, in appeal, Ld. First Printed from counselvise.com 2 | P a g e Appellate Authority sustained the addition. Against the above, assessee appealed before the Tribunal. 4. After hearing the Ld. DR and perusing the records, I note that it was contended before the AO that the appellant submitted that he had made ATM cash withdrawal of RS. 3,02,000/- out of his HDFC bank loan amount from 31.10.2016 to 08.11.2016 at various places i.e. Mejar Ganj and Sitamarhi. He had taken loan from HDFC bank prior to 2016. He had also took loan of Rs. 9,84,328/- on 17 October 2016 of which Rs. 6,38,616/- credited to his HDFC bank account and the remaining was adjusted against prior loan balance existing at 17 October, 2016. Further he submitted that when he was in home town in Bihar to celebrate Diwali festival and as demonetization took place during those period he took cash to deposit in his bank account in Delhi. AO noted that the assessee has made cash deposits amounting to Rs. 11,59,000/- in FY 2016-17 relevant assessment year 2017-18 during demonetization period remained unexplained. The assessee failed to give valid explanation about the nature and source of cash deposits, hence the value of cash deposits during demonetization period is deemed as unexplained money u/s. 69A of the Income Tax Act, 1961 read with section 115BBE of the Act and added to the total income of the assessee. Ld. CIT(A), upheld the addition in dispute. I have given my thoughtful consideration to the assessee’s contentions before the lower authorities and Revenue’s contention in support of the impugned addition. I find no reason to accept either parties stand in entirety. This is for the precise reason that neither the assessee has been able to properly explain the source of cash deposits nor the department could simply brush aside all the relevant evidence at one go. Be that as it may, the tribunal is of the considered view that in these peculiar facts, it is deemed appropriate in the larger interest of justice to confirm the impugned addition of Rs. 11,59,000/- to Rs. 2,59,000/- only with a rider that the same shall not be as a precedent. The assessee gets relief of Rs. 9,00,000/- in other words. Necessary computation shall follow as per law. 5. So far as assessee’s assessment u/s. 115 BBE of the Act is concerned, in view of Hon’ble Madras High Court in SMILE Microfinance Ltd. vs. ACIT in WP(MD) no. 2078 of 2020 & 1742 of 2020 dated 19.11.2024 (Mad.) has already settled the issue against the department that the law applies to the transaction on or after 01.04.2017 only. Printed from counselvise.com 3 | P a g e 6. The instant assesseee’s appeal is partly allowed in the aforesaid terms. Order pronounced on 07.11.2025. Sd/- (MAHAVIR SINGH) VICE PRESIDENT Date: 07-11-2025 SR Bhatnagar Copy forwarded to: - 1. Appellant 2. Respondent 3. DIT 4. CIT (A) 5. DR, ITAT Assistant Registrar, ITAT, Delhi Bench Printed from counselvise.com "