RAKESH KUMAR WADHWA,KESRISINGHPUR V. ITO WARD 1 SRI GANGANAGAR, SRI GANGANAGAR

ITA 488/JODH/2023

AI Insights

The case revolves around an appeal by Rakesh Kumar Wadhwa against the order of the National Faceless Appeal Centre (NFAC), which sustained the addition of Rs. 2,90,30,020/- to the assessee's income for the Assessment Year 2015-16. The addition was initially made by the Income Tax Officer (ITO) under section 68 of the Income Tax Act, 1961, based on unexplained cash deposits in the assessee's bank account during the demonetization period. The assessee contended that these deposits were actually the sale proceeds of an AOP, M/s Om Prakash Saurabh Tak & Party, of which he was a member, and were accounted for in the books of the AOP. The Tribunal, after considering the evidence and submissions, concluded that the cash deposits were not the personal income of the assessee but belonged to the AOP, thus allowing the appeal and deleting the addition.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 841382 (ITAT-JODHPUR)
• Duration Of Justice: 2 year(s) 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 25-11-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALIT KUMAR BISHNOI
• Assessee Lawyers: VIRENDRA JAIN; PHYSICAL
• Section: 147; 153A; 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE DR. MITHA LAL MEENA, HON’BLE ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, HON’BLE JUDICIAL MEMBER ITA No. 488/Jodh/2023 (Assessment Year – 2015-16) Rakesh Kumar Wadhwa Ward No. 10 Kesrisinghpur, Sri Ganganagar - 335027 PAN No. AAKPW 7152 P ITO Ward 1 Sri Ganganagar Assessee by Shri Virendra Jain, Advocate (Physical) Revenue by Shri Lalit Kumar Bishnoi, Addl. CIT-DR (Virtual) Date of Hearing 29.01.2026. Date of Pronouncement 26.02.2026. ORDER DR. MITHA LAL MEENA, A.M.: This appeal is filed by assessee against the order of National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as NFAC/CIT(A)] dated 21.09.2023 with respect to Assessment Year 2015-16 challenging therein sustaining the addition of cash deposits in the bank account during demonetization period u/s 68 of the Act based on surmises and self imagination. 2. Grounds of Appeal are as under: 1. The addition of Rs. 29030020/- on account of out of cash deposit in bank account which is not reliable and added unexplained of Rs. Printed from counselvise.com ITA No. 488/Jodh/2023 Asst. Year: 2015-16 2 29030020/- added an income u/s 68 of the Income Tax which is not justify and unlegal. 2. That the ITO made assessment u/s 147 which not justify illegal. 3. That the Ld. ITO not allowed full opportunity to the assessee to submit the required documents the ITO not issue any proper notice for addition. 4. That the assessee to reserve the rights to add any ground on or before decision the appeal. 3. Briefly the facts of the case are that the appellant assessee is an individual and a salaried employee and who was also a member of AOP M/s Om Prakash Saurabh Tak & Party (Sirohi Jalore Group), Udaipur a firm which was engaged in trading of liquor. During the course of assessment proceedings, the AO based on the bank statement stated that cash deposit transactions have been made by the assessee in its bank accounts during the assessment proceedings which the assessee has failed to provide any explanation. The AO being not satisfied with the explanation of the assessee, he held the said cash deposit in its bank accounts as un-explained income in the hands of assessee and added to its total income u/s 68 of the Income Tax Act, 1961. 4. Aggrieved assessee went in appeal before the NFAC who has confirmed the addition by observing that the Bank Account No. 079705500339 maintained with ICICI Bank was in the name of the appellant but also shown in Printed from counselvise.com ITA No. 488/Jodh/2023 Asst. Year: 2015-16 3 the books of the said AOP. It has further observed that it was not clear whether the bank account is in name of the appellant and the appellant is claiming the transaction are pertaining to AOP and that the assessee failed to furnish documentary evidences to establish relationship between the assessee and the AOP. Accordingly, he has confirmed the said addition of the cash deposit in the bank account of the assessee by endorsing the finding of the AO. 5. The Ld. Counsel for the assessee has submitted that the assessee is a member of the AOP i.e. M/s Om Prakash Saurabh Tak & Party (Sirohi Jalore Group), Udaipur who has filed its return of income on 30.09.2015 vide PAN No. AAAAO4563F. The AR of the appellant contended that the assessee has filed copy of the receipt of return along with audited statement of account along with balance sheet, trading and profit and loss account before the Authorities below and enclosed copy of the said statements vide assessee’s paper book no. 19 to 34 before the Bench. The AR submitted that the cash deposits made in the same bank account no. 079705500339 of ICICI Bank were out of the sale proceeds of M/s Om Prakash Saurabh Tak & Party (Sirohi Jalore Group), Udaipur in which the appellant was a member of the aforesaid AOP. All the bank entries in the ICICI bank account no. 079705500339 was accounted for in the books of accounts of the AOP firm. The AR has filed the copy of the ITR Printed from counselvise.com ITA No. 488/Jodh/2023 Asst. Year: 2015-16 4 duly supported with audited report of the AOP firm and copy of ledger account in the books of the said firm (assessee’s paper book page no. 35 to 40). 6. The Ld. AR argued that all the amount of cash deposit in the Rakesh Wadhawa’s bank account no. 079705500339 was belonging to M/s Om Prakash Saurabh Tak & Party company and the cash deposit were made out of the sale proceeds of the AOP firm. Meaning thereby that the said cash deposit in the bank account has no relation to the income of the appellant assessee because the cash so deposited in the bank account belonging to the assessee’s firm. The AR has also filed the copy of the Assessment Order of the Om Prakash Saurabh Tak & Party for the said assessment year 2015-16 where the assessment has been completed by the AO u/s 153A vide Assessment Order dated 02.06.2021 in the status of company accepting the return of income. He prayed that the said addition of Rs. 2,90,30,020/- made u/s 68 of the Act may be deleted. 7. The Ld. DR stands by impugned order. 8. We have heard both the sides, and perused the material on record. Admittedly the cash deposit made in the bank account no. 079705500339 of the ICICI Bank was sale proceeds of M/s Om Prakash Saurabh Tak & Party in which the appellant assessee was member of AOP. The department has failed Printed from counselvise.com ITA No. 488/Jodh/2023 Asst. Year: 2015-16 5 to disprove the fact that the cash deposit amounting to Rs. 2,90,30,020/- were out of the cash sales of M/s Om Prakash Saurabh Tak & Party. The Ld. CIT(A) did not rebut the contention of the appellant assessee that the entire amount of cash deposit of Rs. 2,90,30,020/- made in the said bank account no. 079705500339 of the ICICI Bank of the appellant assessee was made out of the sale proceeds of M/s Om Prakash Saurabh Tak & Party (AOP) in which he was a member of the said AOP. It is noted that all the bank entries in the ICICI Bank account no. 079705500339 of the assessee was accounted for in the books of the AOP firm which has been assessed in the status of company by the AO for the same assessment year by accepting the return of income. 9. It is further noted that the department failed to controvert the evidences filed by the assessee in support of its claim with the documentary evidences such as ITR, audit report of AOP firm and copy of ledger in the books of the firm/company filed before the authorities below and before the Tribunal. 10. In our view, the AO and Ld. CIT(A) has failed to appreciate the facts available on record and the evidence filed by the assessee before them regarding the cash deposit in the assessee’s bank account being made out of Printed from counselvise.com ITA No. 488/Jodh/2023 Asst. Year: 2015-16 6 the sale proceeds of the AOP firm which was being part of the cash in hand lying with the said firm out of its sale proceeds. 11. Meaning thereby that appellant assessee has nothing to do with cash deposits because the said bank account was used by the AOP firm for the said cash deposited in the bank account which was actually though owned in the name of the assessee but used by the AOP firm. As prayed, the corresponding transactions of the cash deposit with reference to the cash sales of the liquor accounted for in the ledger maintained by the said firm/company. 12. Considering the factual matrix of the case, we hold that the Ld. CIT(A) decision is perverse to the facts on record which cannot be approved. Accordingly, in the larger interest and fair justice, we find merit in the instant submissions of the assessee and hold that the amount of cash deposit of Rs. 2,90,30,020/- in the bank account no. 079705500339 of ICICI Bank was belonging to Om Prakash Saurabh Tak & Party firm and not addition is called for in the hands of the assessee. Accordingly, the addition of Rs. 2,90,30,020/- is deleted. 13. Since the appellant assessee gets relief on merits of the case and hence the legal issue is not adjudicated. 14. In the result, the appeal of the assessee is allowed. Printed from counselvise.com ITA No. 488/Jodh/2023 Asst. Year: 2015-16 7 Order pronounced in the open court on 26/02/2026. Sd/- Sd/- (SUDHIR PAREEK) (DR. MITHA LAL MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 26/02/2026. Nimisha Sr. PS True Copy Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File BY ORDER, (Asstt. Registrar), ITAT, Jodhpur Printed from counselvise.com "