PAWAN KUMAR CHHAPOLIA,CUTTACK V. ITO, WARD-2(3),CUTTACK, CUTTACK

ITA 547/CTK/2024

AI Insights

The case involves an appeal by Pawan Kumar Chhapolia against the order of the CIT(A), National Faceless Appeal Centre, Delhi, which confirmed the addition of Rs. 10,15,000 as unexplained money under section 69A of the Income Tax Act for the assessment year 2017-2018. The assessee argued that the amount was re-deposited cash withdrawn for construction activities that were not carried out. The AO and CIT(A) had initially treated this amount as unexplained, leading to the appeal. The Tribunal, after reviewing the bank statements and the timing of the withdrawals and deposits, concluded that the assessee had substantiated the source of the deposits, leading to the decision in favor of the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 30030 (ITAT-CUTTACK)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S.C.MOHANTY
• Assessee Lawyers: MOHIT SHETH

Judgement Text

" आयकर आयकर आयकर आयकर अपीलीय अपीलीय अपीलीय अपीलीय अिधकरण अिधकरण अिधकरण अिधकरण, कटक कटक कटक कटक \u0001यायपीठ \u0001यायपीठ \u0001यायपीठ \u0001यायपीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.547/CTK/2024 (िनधा\u0005रण िनधा\u0005रण िनधा\u0005रण िनधा\u0005रण वष\u0005 वष\u0005 वष\u0005 वष\u0005 / Assessment Year : 2017-2018) Pawan Kumar Chhapolia, C/O. Ganpatrai Balabux, Cuttack-753002 Vs ITO, Ward-2(3), Cuttack PAN No. : AANPC 9872 F (अपीलाथ\u000f अपीलाथ\u000f अपीलाथ\u000f अपीलाथ\u000f /Appellant) .. (\u0010\u0011यथ\u000f \u0010\u0011यथ\u000f \u0010\u0011यथ\u000f \u0010\u0011यथ\u000f / Respondent) िनधा\u0005\u0013रती िनधा\u0005\u0013रती िनधा\u0005\u0013रती िनधा\u0005\u0013रती क\u0016 क\u0016 क\u0016 क\u0016 ओर ओर ओर ओर से से से से /Assessee by : Shri Mohit Sheth, Advocate राज\u0018व राज\u0018व राज\u0018व राज\u0018व क\u0016 क\u0016 क\u0016 क\u0016 ओर ओर ओर ओर से से से से /Revenue by : Shri S.C.Mohanty, Sr. DR सुनवाई क\u0002 तारीख / Date of Hearing : 22/01/2025 घोषणा क\u0002 तारीख/Date of Pronouncement : 22/01/2025 आदेश आदेश आदेश आदेश / O R D E R Per Bench : The present appeal is filed by the assessee against the order of ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, passed in IT Appeal No.CIT(A), Cuttack/10391/2019-20, vide DIN & Order No.ITBA/NFAC/S/250/2024-25/1065987293(1), dated 24.06.2024 for the assessment year 2017-2018, on the following grounds :- 1. For that under the facts and the circumstances of the case the Ld. CIT(A) was not justified in dismissing the appeal without understanding the fact and without going through the materials furnished before the Ld. CIT(A). 2. For that under the facts and in the circumstance of the case the amount of Rs. 10,15,000/- should not have been treated as unexplained money u/s.69A and the Ld. AO should have been accepted the documentary evidences furnished before him. 3. For that under the facts and in the circumstance of the case the assessment as made by the Ld. AO and sustained by the Learned CIT(A) regarding the addition of Rs. 10,15,000/- as unexplained money u/s.69A is arbitrary, unjustified & bad-in- law. ITA No.547/CTK/2024 2 4. For that the assessment was made and completed u/s.144 is arbitrary, unjustified & bad-in-law. As the assessee has furnished complete explanation with the all the supporting details & documents during the course of Original Assessment and as well as before the Ld. CIT(A) also. 5. For that the Ld. AO should have accepted the explanation and should have accepted the return of income filed by the appellant. 6. For that under the facts and the circumstances of the case the addition of Rs. 10,15,000/- as made u/s.69A is arbitrary, unlawful and unjustified. 2. Brief facts of the case are that the assesee is an individual and having income from business and profession. During the year the assesee has made cash deposit of Rs.10,15,000/- in his bank account, which were alleged as unexplained by the AO and addition was made u/s.69A of the Act. In first appeal, the ld. CIT(A) confirmed the addition. Thus, the present appeal is filed by the assesee before us. 3. During the course of hearing, ld. AR submitted that the assesee is having sufficient bank balance in his bank account out of which cash were withdrawn on two occasions on 21.04.2016 of Rs.5,15,000/- and Rs.5,00,000/-, respectively. It was submitted by the ld. AR that the said cash was withdrawn for the purpose of some construction activities to be carried out, however, since the assesee could not negotiate with the contractor, the same was re-deposited just after four days i.e. on 25.04.2016 by way of two deposits of Rs.5,00,000/- each and on 26.04.2016 of Rs.15,000/-. According to ld. AR the said cash was deposited out of cash withdrawal made just four days back and, therefore, no addition is required to be made. He also placed a copy of the bank ITA No.547/CTK/2024 3 account placed in the paper book in support of the claim, which reads as under :- ITA No.547/CTK/2024 4 4. Per Contra, ld. Sr. DR submitted that the assesee has failed to substantiate the source of cash deposit as the opening balance was majorly used for making payments for land purchase and the ld. CIT(A) has already observed that the assesee has failed to substantiate the source of the cash deposit. Thus, he prayed for confirmation of the addition so made. 5. We have heard the rival submissions and perused the material available on record. From the perusal of the bank statements submitted before us, it is observed that on the first date of the previous year, there was a balance of Rs.68,19,148/- out of which Rs.52,80,000/- was paid to one Smt. Meena Devi Agarwal on 19.04.2016 towards purchase of land and thereafter the balance of Rs.15,39,256/- was available in the bank account of the assesee. Out of these bank balance of Rs.10,15,000/- was withdrawn on 21.04.2016 on two occasions and thereafter on 25.04.2016 Rs.10 lakhs was deposited by two entries and on the very next date i.e. on 26.04.2016 Rs.15,000/- was deposited. The period between cash withdrawn and deposited is only of four days and the revenue has not established that the cash so withdrawn was used by the assesee elsewhere and the cash deposited was not out of such cash withdrawal. Once there was sufficient opening balance available in the assessee’s bank account, which is duly utilized for making withdrawals, therefore, raising question about the source of cash deposit in the year under appeal is not justified, more particularly when no doubts were made in preceding year when deposits were made in bank account which are the immediate ITA No.547/CTK/2024 5 source of withdrawal in the year before us. Since the assesee has been able to demonstrate that the immediate source of cash deposited in the bank account is out of cash withdrawn from bank just immediately four days back, therefore, we are of the considered view that no addition is required to be made by holding such deposits as unexplained. Thus, we direct the AO to delete the addition so made. 6. In the result, appeal of the assesee is allowed. Order pronounced in the open court on 22/01/2025. Sd/- (GEORGE MATHAN) Sd/- (MANISH AGARWAL) \u0001याियक \u0001याियक \u0001याियक \u0001याियक सद\bय सद\bय सद\bय सद\bय / JUDICIAL MEMBER लेखा सद\u0003य/ ACCOUNTANT MEMBER कटक कटक कटक कटक Cuttack; \u0003दनांक Dated 22/01/2025 Prakash Kumar Mishra, Sr.P.S. आदेश आदेश आदेश आदेश क\u0002 क\u0002 क\u0002 क\u0002 \u0003ितिलिप \u0003ितिलिप \u0003ितिलिप \u0003ितिलिप अ\tेिषत अ\tेिषत अ\tेिषत अ\tेिषत/Copy of the Order forwarded to : आदेशानुसार आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER, (Assistant Registrar) आयकर अपीलीय अिधकरण, कटक/ITAT, Cuttack 1. अपीलाथ\u0007 / The Appellant- Pawan Kumar Chhapolia, C/O. Ganpatrai Balabux, Cuttack-753002 2. \b\tयथ\u0007 / The Respondent- ITO, Ward-2(3), Cuttack 3. आयकर आयु\u0006(अपील) / The CIT(A), 4. आयकर आयु\r / CIT 5. िवभागीय \u0010ितिनिध, आयकर अपीलीय अिधकरण, कटक कटक कटक कटक / DR, ITAT, Cuttack 6. गाड\u0010 फाईल / Guard file. स\tयािपत \bित //True Copy// "