REENA,PATIALA V. ITO WARD 1 PATIALA, PATIALA

ITA 272/CHANDI/2025

AI Insights

The case involves an appeal by Ms. Reena against the order of the Commissioner of Income Tax (Appeals), which confirmed the assessment made by the Assessing Officer on a best judgment basis under section 144 of the Income Tax Act. The assessment was initially made due to unexplained cash deposits of Rs.21.09 Lacs in the assessee's account. The assessee argued that these deposits were from the sale of properties and business receipts, supported by a cash flow statement and a cash book for the relevant financial years. The Tribunal found that the assessee had successfully discharged the onus of establishing the sources of the cash deposits and thus allowed the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 716713 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Appeal Filed On: 21-02-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA DHAR LD.
• Assessee Lawyers: RAJIV SALDI LD
• Keywords: Business income
• Section: 144

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH PHYSICAL HEARING BEFORE HON’BLE SHRI LALIET KUMAR, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपीलसं./ ITA No.272/CHANDI/2025 (िनधाŊरणवषŊ / Assessment Year: 2017-18) Ms. Reena 1989 &1990/3 Gainda Ram Street RaghoMajra, Patiala. बनाम/ Vs. ITO Ward No 1, Patiala. ̾थायीलेखासं./जीआइआरसं./PAN/GIR No. AQSPR-8505-M (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : Shri Rajiv Saldi (CA) – Ld. AR ŮȑथŎकीओरसे/Respondent by : Smt. Priyanka Dhar (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 04-08-2025 घोषणाकीतारीख /Date of Pronouncement : 18-08-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2017-18 arises out of an order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 16-01-2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] on best judgment basis u/s. 144 of the Act on 28-10-2019. It could be seen that the case of the assessee was scrutinized to verify sources of cash deposit of Rs.21.09 Lacs. In the Printed from counselvise.com 2 absence of any submissions as forthcoming from the assessee, Ld. AO considered the deposits as well as interest income as the income of the assessee and made assessment of Rs.23.97 Lacs 2. During first appeal, it transpired that the assessee acted as a small-time vendor of snacks and earned business income. She also stated that deposits of Rs.21.68 Lacs were sourced out of sale of certain property. However, in the absence of any acceptable evidences, Ld. CIT(A) confirmed the assessment against which the assessee is in further appeal before us. 3. The Ld. AR has placed on record cash flow of the assessee as under: - No. Nature of Source of Cash Amount Received 1. Cash received on sale of properties during FY 2015-16 Rs.14.25 Lacs 2. Cash received on sale of properties during FY 2016-17 Rs.7.43 Lacs 3. Re-deposit of cash withdrawn Rs.3.00 Lacs 4. Business Receipts in cash Rs.9.63 Lacs Total Rs.34.31 Lacs The Ld. AR has also placed on record cash book of the assessee for FY 2016-17 and 2015-16 to demonstrate that the assessee had sufficient cash balance to make the impugned deposits. The Ld. AR has also placed on record computation of income of the assessee. Upon perusal of the same, it could be seen that the assessee has suffered Long Term Capital Loss of Rs.5.06 Lacs on sale of properties listed at serial nos. 1 & 2. The assessee has computed business income of Rs.1.25 Lacs on business receipts of Rs.15.14 Lacs which translate into profit rate of more than 8%. The other source of income for the assessee is interest income which aggregate to Rs.3.77 Lacs. Printed from counselvise.com 3 The total income is thus computed at Rs.4.92 Lacs after deduction u/s 80TTA for Rs.0.10 Lacs. Upon perusal of the same, it would appear that the assessee has successfully discharged the onus of establishing the sources of cash deposits. Accordingly, the impugned order is set- aside and Ld. AO is directed to accept this computation of income after due verification thereof. The impugned addition of Rs.21.09 Lacs of cash deposits as made by Ld. AO stand deleted. The Ld. AO is also directed to re-compute the income of the assessee accordingly. The assessee is directed to plead and prove its computation of income. 4. The appeal stand allowed for statistical purposes. Order pronounced on 18-08-2025 Sd/- Sd/- (LALIET KUMAR) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 18-08-2025. आदेश की Ůितिलिप अŤेिषत /Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT CHANDIGARH Printed from counselvise.com "