NURMAHAMMAD ABHRAMBHAI MOMIN LEGAL HEIR OF LATE ABHRAMBHAI RASULBHAI MOMIN,AHMEDABAD V. THE ITO, WARD-3(2)(1), AHMEDABAD

ITA 568/AHD/2025

AI Insights

The case revolves around an appeal by Nurmahammad Abhrambhai Momin against the order of the National Faceless Appeal Centre (NFAC), Delhi, which upheld the additions made by the AO regarding unexplained cash deposits and bogus agricultural income for the assessment year 2017-18. The AO had added Rs. 13,50,000 as unexplained money under section 69A, presuming that no prudent man would keep such a large amount of cash. The CIT(A) partially allowed the appeal by recognizing some agricultural income but upheld the addition regarding unexplained money. The Tribunal, after reviewing the evidence, including bank statements and cash books, found that the assessee had adequately explained the sources of the cash deposits and agricultural income, leading to the allowance of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 652898 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Other Referred Cases: Sumati Dayal Vs CIT (1995) 214 ITR 801 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVINDRA
• Assessee Lawyers: PRADEEP TULSIAN
• Keywords: Set aside; Principle of natural justice; Bogus
• Section: 143(3); 142(1)

Judgement Text

"THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH Before Dr. BRR Kumar, Vice President And Ms. Suchitra Kamble, Judicial Member Nurmahammad Abhrambhai Momin Legal heir of late Abhrambhai Rasulbhai Momin, Masjid Vas, At & Post Telav Sanand, Ahmedabad PAN: AXFPM0878C (Appellant) Vs The ITO, Ward-3(2)(1) Ahmedabad (Respondent) Assessee by: Shri Pradeep Tulsian, A.R. Revenue by: Shri Ravindra, Sr. D.R. Date of hearing : 08-05-2025 Date of pronouncement : 19-06-2025 आदेश/ORDER Per Suchitra Kamble, Judicial Member: This is an appeal filed against the order dated 17-02- 2025 passed by National Faceless Appeal Centre (NFAC), Delhi for assessment year 2017-18. 2. The grounds of appeal are as under:- “1. Both AO and CIT(A) has accepted the contention of the assessee that assessee was having sufficient cash withdrawal from the bank account but failed to accept the same to the full extent. AO has added Rs. 13,50,000/- as unexplained money only on the assumption/presumption that no man will keep such a huge cash. Even the assessee has explained and produced the books of account and shown the same as opening cash balance as on 01.04.2016. Moreover, AO/CIT(A) also failed to mention that what is the general cash which a prudent man will keep in hand. This addition is based on his assumption/presumption only and without any jurisdiction and therefore, has to be deleted. ITA No. 568/Ahd/2025 Assessment Year 2017-18 I.T.A No. 568/Ahd/2025 Murmahammad Abhrambhai Momin Legal Heir of late Abhrambhai Rasulbhai Monin , A.Y. 2017-18 2 2. Later on aggrieved by the assessment order appellant filed an appeal with CIT(A). CIT (A) partially allowed agriculture income of Rs. 2,75,680/- and dismissed appeal against Rs 13,50,000/- on account of unexplained money u/s 69A being no prudent man will keep such a huge cash. 3. The assessee has submitted the source of cash deposited in the following table before CIT(A). Details of Cash Deposits Details of Source of Cash deposits Date Bank in which deposited Amount (in Rs.) Date Particulars Amount (in Rs.) 11/11/2016 SBI 10,00,000 29/04/2016 Withdrawal from SBI 5,00,000 13/11/2016 SBI 2,00,000 10/05/2016 Withdrawal from OBC 10,000 18/11/2016 SBI 3,70,000 16/05/2016 Withdrawal from OBC 80,000 29/11/2016 SBI 4,50,000 23/05/2016 Withdrawal from OBC 12,500 16/11/2016 OBC 3,50,0000 31/05/2016 Withdrawal from OBC 15,000 19/11/2016 OBC 11,000 04/06/2016 Withdrawal from OBC 2,00,000 22/11/2016 OBC 1,92,000 09/06/2016 Withdrawal from SBI 5,00,000 25/11/2016 OBC 1,00,000 14/06/2016 Withdrawal from SBI 5,00,000 16/11/2016 Bank of Maharastra 49,000 21/06/2016 Withdrawal from SBI 15,000 18/11/2016 Bank of Maharastra 49,000 30/07/2016 Withdrawal from OBC 1,10,000 19/11/2016 Bank of Maharastra 49,000 02/08/2016 Withdrawal from SBI 2,500 21/11/2016 Bank of Maharastra 49,000 06/09/2016 Withdrawal from OBC 50,000 07/09/2016 Withdrawal from SBI 3,00,000 17/09/2016 Withdrawal from SBI 2,500 14/10/2016 Withdrawal from SBI 80,000 15/10/2016 Withdrawal from SBI 2,00,000 09/04/2016 Agricultural Income 1,40,240 05/09/2016 Agricultural Income 1,60,340 Total 28,69,000 Total 28,80,580 Cash Available after Deposit 11,580 4. The year wise opening and closing balance as mentioned by the assessee is given here below:- Financial Year Opening Balance Closing balance 2015-16 8,96,810/- 13,50,000 2016-17 13,50,000/- 3,64,300 5. The above table clearly indicate that the assessee was regularly withdrawing the cash from the bank. The assessee has deposited the cash of Rs 10,00,000/- on 11/11/2016 in SBI A/c i.e. within 2 days (after demonetization declared by government on 8/11/2016 night) and subsequently he has regularly deposited the cash i.e. Rs. 2,00,000/- deposited on 13/11/2016 and Rs. 3,70,000/- on 18/11/2016 with SBI Bank. This proves that the assessee has reason to deposit the cash as the currency was banned by the Government with immediate effect i.e. 8/11/2016. 6. The Hon’able CIT(A) has failed to consider the assessee reply and relied upon the following judgement as given on Para 4.3.2 of CIT(A) order page no. 14: \"It has been held by the Hon'ble Supreme Court in the Case of Sumati Dayal Vs CIT (1995) 214 ITR 801 (SC) that the time period between cash in hand and deposit of such cash in bank account should not be too long. In the ordinary course, it is human tendency that a person who possesses a large amount of cash in hand, will deposit the same into the hank account immediately, once he comes to know that the currencies which he holds/possesses are banned by the prescribed authorities from circulation and that too he will deposit all the currencies in on a single day as one time deposit and not in piece-meal at different dates. “Human Probability Test” is one of the I.T.A No. 568/Ahd/2025 Murmahammad Abhrambhai Momin Legal Heir of late Abhrambhai Rasulbhai Monin , A.Y. 2017-18 3 important tests laid down the highest Court of India in order to check the genuineness of the transactions entered into the books of account of the assessee.” Therefore CIT(A) has relied upon a judgement of Apex Court which has specifically stated that it is a human tendency who possesses a large amount of cash in hand which deposit the same in sand A/c immediately, once he same to know about that the currencies which he holds/possesses are banned by the prescribed authorities from circulation and that too, he will deposit all the currencies in on a single day as one time deposit and not in piece-meal at different dates. \"Human Probability Test\" is one of the important tests laid down the highest Court of India in order to check the genuineness of the transactions entered into the books of account of the assessees. Therefore, as mentioned in Para 5 herein above (Ground of Appeals) assessee has deposited the whole cash in bank A/c within 2 to 5 days after demonetization in 2 to 3 tranches and has duly complied with the \"Human Probability Ted as decided by the Apex Court in the above judgement. 7. That the AO is erred in treated the cash deposit as income since reception when he has framed an opinion. Simply cash deposited cannot be a reason for one of the assessee Cash Deposited cannot be treated as income merely on the suspicion and presumption of the AO mainly when assessee has co-operated and submitted the documents and given explanations. 8. That AO has farmed his opinion from the initial stage of the proceedings und prepared his mind before starting the assessment to treat the amount as income, without going through the relevant details. Therefore, the assessment is based on his own presumption and theory. 9. That assessee has explained the source of cash deposit, submitted bank statements and cash book. Assessee explained that cash deposit was from opening balance which he has as on 01/4/2016. But AO has ignored the fact and framed his mind in his own thinking and assumptions and treated cash deposit as unexplained money u/s. 69A. Therefore, the learned Assessing Officer has grossly erred in making additions by rejecting the assessee contention without any basis and it is only his guess work. 10. That the AO has ignored the explanations and documents submitted by the assessee and passed the order u/s 143(3) of Income Tax Act, 1961. 11. That on the facts and circumstances of the case and in law, the learned AO has passed order u/s 143(3) of Income Tax Act.1961, which is Bad in Law and against the principles of natural justice. 12. That the learned A.O has erred in not considering actual facts and circumstances of the case and also not considering/appreciating the evidences, supporting details and documents submitted by the appellant. His act is totally based on presumption, assumption, surmises, conjectures and suspicions. 13. That the ld. Assessing officer grossly erred in deliberately ignoring several reasonable plausible submissions which had material bearing on the impugned case and ignoring the same is unjustified, bad in law, is in utter violation of principal of natural justice and ought to have been considered. No-consideration is unjustified, bad in law and entire approach deserves to be deprecated. 14. That on the facts and in the circumstances of the case the ld. Assessing Officer grossly erred in creating an illegal demand against the assessee appellant 15. The appellant craves leave to add, alter, modify or amend any ground on or before the date of hearing. PRAYER OF APPEAL 1. Assessee applicant is hereby humbly submitted that the addition of Rs. 13,50,000/- on account of cash deposited under section 69A (added as unexplained money) 2. Penalty proceedings u/s 274 read with section 271AAC(1) and u/s 274 read with section 270A should be dropped. 3. AO should be directed to delete the addition and set aside the order.” 3. The assessee filed return of income on 22-08-2017 declaring total income at Rs. 3,56,370/-. The case was selected for limited scrutiny and notice u/s. 143(2) of the I.T.A No. 568/Ahd/2025 Murmahammad Abhrambhai Momin Legal Heir of late Abhrambhai Rasulbhai Monin , A.Y. 2017-18 4 Income Tax Act, 1961 was issued on 14-08-2018 which was duly served upon the assessee. Notice u/s. 142(1) of the Act was issued to the assessee and served to the assessee. In response to the notices, the assessee submitted the details. The assessee earned income on agricultural sales, rent income and income from other sources. The Assessing Officer observed that during the demonetization period, the assessee had deposited cash of Rs. 20,20,000/- in account maintained with SBI, Rs. 6,53,000/- maintained with Oriental Bank of Commerce and Rs. 1,96,000/- with Bank of Maharashtra. On being asked about the source of cash deposits, the assessee stated that the cash deposits is from cash withdrawals made during the year and related to the agricultural sales. The assessee submitted the cash book as well. After taking cognizance of the same, the Assessing Officer held that there is no land documents furnished by the assessee. No details of agricultural sale bills were produced and hence the Assessing Officer held that the agricultural income of Rs. 2,75,680/- is bogus and treated the same as income from other sources thereby making addition to that extent. The Assessing Officer also made addition of Rs. 13,50,000/- as unexplained money related to the source of opening balance as mentioned in the cash book u/s. 69A of the Act. 4. Aggrieved by the assessment order, the assessee filed appeal. The CIT(A) partly allowed the assessee of the assessee. I.T.A No. 568/Ahd/2025 Murmahammad Abhrambhai Momin Legal Heir of late Abhrambhai Rasulbhai Monin , A.Y. 2017-18 5 5. The ld. A.R. submitted that in spite of submissions of all the details related to the source of cash deposits and agricultural income, the Assessing Officer treated Rs. 2,75,680/- as income from other sources in respect of income from agriculture. The ld. A.R. submitted that the assessee is an agriculturist and having the rent and interest income. The source of cash deposit was explained by the assessee through bank statements, cash books and documents of ownership of agricultural land in its support but the same was totally ignored by the Assessing Officer as well as by the CIT(A). As regards the addition of Rs. 14,50,000/- on account of unexplained money u/s. 69A, the ld. A.R. submitted that the assessee has submitted all the details related to the cash deposits and therefore the Assessing Officer should have taken cognizance of the various withdrawals from SBI since 09-04-2016 to 21-11- 2016 for which the assessee has filed the labour account as well as cash books. Thus, the cash details were given by the assessee but the same was totally ignored by the Assessing Officer as well as CIT(A). 6. The ld. D.R. relied upon the assessment order and the order of the CIT(A). 7. We have heard both the parties and perused all the relevant materials available on record. From the perusal of the records, it can be seen the assessee has given the details of the agricultural produce including the documents related to the ownership of the land (agricultural land). But all I.T.A No. 568/Ahd/2025 Murmahammad Abhrambhai Momin Legal Heir of late Abhrambhai Rasulbhai Monin , A.Y. 2017-18 6 these details were totally ignored including that of sale receipts produced by the assessee during the proceedings. The details of the same were partly admitted by the CIT(A) thus, there is discrepancy in the finding related to the documents produced by assessee. The finding of the CIT(A) that there is a bogus agricultural income appears to be not justifiable. Hence, the said addition does not sustain. As regards to addition of Rs. 13,50,000/- on account of unexplained money u/s. 69A of the Act, the assessee has given the details of cash withdrawals on various dates and the deposit of the same on the subsequent occasions which can be seen from cash books as well as from the bank statements. Therefore all these details should have been taken into account by the Assessing Officer as well as by the CIT(A). Thus, the addition made by the Assessing Officer is not correct. Hence, the appeal of the assessee is allowed. 8. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 19-06-2025 Sd/- Sd/- (Dr. BRR Kumar) (Suchitra Kamble) Vice President Judicial Member Ahmedabad : Dated 19/06/2025 आदेश क\u0006 \u0007\bत ल प अ\u000fे षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, I.T.A No. 568/Ahd/2025 Murmahammad Abhrambhai Momin Legal Heir of late Abhrambhai Rasulbhai Monin , A.Y. 2017-18 7 उप/सहायक पंजीकार आयकर अपील\u0012य अ\u0013धकरण, अहमदाबाद "