PARMAL SINGH,PANCHKULA V. INCOME TAX OFFICER WARD NO 3, PANCHKULA

ITA 432/CHANDI/2025

AI Insights

The case revolves around an appeal by Shri Parmal Singh against the order of the Commissioner of Income Tax (Appeals) which confirmed the addition of Rs.33,63,750/- to his income for the assessment year 2016-17. The addition was initially made by the AO under Section 68 of the Income Tax Act, suspecting unexplained cash deposits in a joint bank account held by the assessee and his brother. The assessee contended that the deposits were proceeds from the sale of agricultural land. The Tribunal, after reviewing the sale deeds and considering the withdrawals and deposits in the bank account, concluded that the assessee had a sufficient source of income to explain the deposits and thus allowed the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 714597 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR
• Assessee Lawyers: RISHAB GUPTA
• Section: 68

Judgement Text

"आयकर अपीलȣय अͬधकरण,चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘A’ CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 432/CHD/2025 Ǔनधा[रण वष[ / Assessment Year: 2016-17 Shri Parmal Singh, C/o M.K. Aggarwal & Associates, SCO 1, First Floor, Sector 11, Panchkula. Vs The ITO, Ward No. 3, Panchkula. èथायी लेखा सं./PAN NO: DLZPS7712A अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent Assessee by : Shri Rishab Gupta, CA Revenue by : Dr. Ranjit Kaur, Addl.CIT, Sr.DR Date of Hearing : 31.07.2025 Date of Pronouncement : 05.08.2025 PHYSICAL HEARING O R D E R PER RAJ PAL YADAV, VP The assessee is in appeal before the Tribunal against the order of the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 21.09.2023 passed for assessment year 2016-17. 2. The assessee has taken five grounds of appeal, however, his grievance revolves around single issue, namely, ld. CIT (Appeals) has erred in confirming the addition of Printed from counselvise.com ITA No.432/CHD/2025 A.Y.2016-17 2 Rs.33,63,750/- which was added by the AO with the aid of Section 68 of the Income Tax Act. 3. The assessee is an agriculturist. He has filed his return of income on 14.03.2017 declaring total income of Rs.3,01,420/- and agriculture income at Rs.52,318/-. The AO has observed that there was a joint account with his brother with Axis Bank where a sum of Rs.77,27,500/- was deposited in cash. The AO confronted the assessee to explain the source of this deposit and ultimately made addition of 50% of the total deposit amounting to Rs.38,63,750/-. 4. On appeal, ld. CIT (Appeals) has given partial relief and deleted a sum of Rs.5 lacs out of the total addition made by the AO. 5. With the assistance of ld. Representative, we have gone through the record carefully. The stand of the assessee was that he alongwith his brother and his mother sold two parcels of agriculture land for a sum of Rs.51 lacs and Rs.51 lacs. The source of the deposit was sale proceeds of alleged agriculture land. The Sale Deeds were executed on 02.11.2015 and 03.12.2014. The assessee, alongwith his Printed from counselvise.com ITA No.432/CHD/2025 A.Y.2016-17 3 brothers has withdrawn Rs.66.72 lacs from the Saving Bank Account which was redeposited. 6. On due consideration of the above facts, we are of the view that assessee has a sufficient source of alleged deposits. He alongwith his brother made huge withdrawals from this Bank Account. The funds in this account were deposits made out of sale proceeds of agriculture land. Copies of the Sale Deed have been placed on record before us as well as before the CIT (Appeals). We have perused the finding of the CIT (Appeals). The only reasoning given by the First Appellate Authority is that it is not humanly possible that somebody would keep this money for such a long period with oneself. We are of the view that prima-facie there was substantial amount available in the family. Now it is quite different as to how somebody will arrange his affairs. The human behaviour cannot be expected to be carried on a particular manner according to the understanding of the CIT (Appeals). Therefore, it is not justifiable at the end of the CIT (Appeals) to confirm the addition simply for the reason that he disbelieves the manner in which money was kept by the Printed from counselvise.com ITA No.432/CHD/2025 A.Y.2016-17 4 individuals. Accordingly, we delete the addition and allow the appeal of the assessee. 7. In the result, appeal is allowed. Order pronounced on 05.08.2025. Sd/- Sd/- (KRINWANT SAHAY) (RAJPAL YADAV) ACCOUNTANT MEMBER VICE PRESIDENT “Poonam” आदेश कȧ ĤǓतͧलͪप अĒेͪषत/ Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकर आयुÈत/ CIT 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड[ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "