RITU DHAKA,JAIPUR V. ITO WD 4(4), JPR, JAIPUR

ITA 2/JPR/2025

AI Insights

The case involves Ritu Dhaka, a government teacher, who appealed against the order of the National Faceless Appeal Centre (NFAC) confirming the addition of Rs. 17,99,000 to her income for the assessment year 2017-18, which was alleged to be unexplained cash deposit under Section 68 of the Income Tax Act, 1961. The Income Tax Officer (ITO) had initially made the addition following the scrutiny of her income tax return, which declared a total income of Rs. 3,45,950. The ITO noted substantial cash deposits in her bank account during the demonetization period and other times, which she could not satisfactorily explain. The CIT(A) upheld the ITO's decision, leading to the appeal before the Tribunal. The Tribunal, after examining the evidence and submissions, concluded that the assessee had adequately explained the source of the cash deposits and that the addition made was not justified.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 469911 (ITAT-JAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Other Referred Cases: M/s. NTPC Ltd. v. CIT, CIT, Poona v. Bhaichand H. Gandhi, Dr. Vishan Swaroop Gupta v. ITO Ward 7(3), Jaipur, ACIT v. M/s. Serajuddin, Smt. Suraj Kanwar Devra v. ITO, Ward 2(2), Udaipur, Smt. Krishna Agarwal v. ITO Ward-1, Pali, Mahendra Kumar v. ITO, Circle (Intl Tax), CIT, Ernakulam v. P.K. Noorjahan
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAUTAM SINGH CHOUDHARY
• Assessee Lawyers: R.S. POONIA
• Keywords: Additional evidence; Question of law; Unexplained investment; Salary income; Principle of natural justice; Rectification of order
• Section: 148; 143(3); 142(1); 119; 154; 68; 22; 69; 13; 158BC; 20

Judgement Text

"vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBkSM+ deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No. 2/JPR/2025 fu/kZkj.k o\"kZ@Assessment Years : 2017-18 Ritu Dhaka C-258, Kardhani Kalwar Road, Jaipur. cuke Vs. The ITO, Ward-4(4), Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AOCPD7309B vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri R.S. Poonia, C.A. jktLo dh vksj ls@ Revenue by : Shri Gautam Singh Choudhary, JCIT lquokbZ dh rkjh[k@ Date of Hearing : 20/02/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement : 01 /04/2025 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM By way of present appeal, the assessee challenges the order of National Faceless Appeal Centre, Delhi [for short CIT(A)] dated 27.12.2024. The dispute relates to the assessment year 2017-18. Ld. CIT(A) passed that the order because the assessee challenged the order of assessment of income passed u/s 143(3) of the Income Tax Act, 1961 (for short “Act”) dated 29.07.2019 passed by ITO, Ward-4(4), Jaipur [ for short AO] before him. 2. In this appeal, the assessee has raised following grounds: - ITA No. 2/JPR/2025 Ritu Dhaka vs. ITO 2 “1. That under the facts and circumstances of the case the Ld. National Faceless Appeal Centre (NFAC) has erred in law and facts in confirming the addition of Rs. 17,99,000/- imposed by the Ld. A.O. on account of unexplained cash deposit u/s. 68 of the I.T. Act, 1961 which is wrong, unwarranted and bad in law. Kindly delete the same. 2. That the appellant craves the permission to add to or amend to any of the above grounds of appeal or to withdraw any of them.” 2.1 Vide application dated 20.02.2025 the assessee raised the three additional grounds which reads as under : 1. That the Ld. A.O. has erred in Law & facts of the case to invoke Section 68 of the I.T. Act, 1961, as the appellant neither maintain any books of accounts nor the Ld. A.O. found any credited in the books of appellant. So, the invocation of Section 68 of the I.T. Act, 1961 is wrong and bad in Law. Kindly delete the addition. 2. That the Ld. A.O. has erred in Law & facts of the case in making addition without following the Principle of Natural Justice & without following the binding instruction of CBDT, instruction No. 20/2015, dated 29.12.2015. So, the addition is bad in law. Kindly delete the same. 3. That the Ld. A.O. has erred in Law & facts of the case by charging the special rate, without mentioning the fact of special rate of tax in assessment order and without mention section of special rate being invoked & why. So, the charging special rate of tax is wrong & bad in Law. Kindly direct to not charge special rate of tax. In that the assessee contended that all the 3 additional grounds are legal grounds and no need to any additional evidences or facts. Therefore in light of Judgment of Hon’ble Supreme Court in case of M/s. NTPC Ltd. v. CIT1(1996 SC 738), the Legal ground can be raised first time on any form. The relevant portion of judgments is as follows:- ITA No. 2/JPR/2025 Ritu Dhaka vs. ITO 3 “7……..undoubtedly, the Tribunal will have the discretion toallow or not allow a new ground to be raised. But where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings we fail tosee why such a question should not be allowed to be raised when it is necessary to consider thatquestion in order to correctly assess the tax liability of an assessee……” 3. The brief facts of the case are that the assessee was filed with return of income declaring total income of Rs. 3,45,950/- on 22.07.2017. This case was selected for Scrutiny under CASS system. Statutory notices were issued, and the assessee filed submission in response. 3.1 Ld. AO noted that the assessee deposited Rs. 16,35,000/- in cash during demonetization. While explaining the source of money the assessee stated that she has taken a mortgage loan of Rs.15,00,000/- deposited in Axis Bank account No.913010008949167 and withdrawal cash from that loan account. Out of loan amount Rs.8,63,830/- invested and balance amount Rs. 6,36,170/- was made available as cash on hand. As regards the remaining amount of Rs. 9,98,830/- the same was stated to be saving out of salary income earned by her. She also stated that she deposited cash of Rs.5,26,000/- in her account during the financial year 2016-17 for which it was submitted that the same was out of withdrawal from other accounts and this amount may be ITA No. 2/JPR/2025 Ritu Dhaka vs. ITO 4 confirmed with the bank statements. Based on that set of facts the assessee was asked to show cause as to why the cash deposited during the demonetization period of Rs. 16,35,000/- & other cash deposited of Rs. 5,26,000/- be not considered as income. In response to that notice the assessee attended the office of the ld. AO and filed written submission on 19.06.2019. In continuation of the assessment proceeding notice u/s 142(1) of the IT Act was issued to the assessee to furnish detail of investment made during the last 3 years and to disclose source of income, detail of house hold expenses and other expenses incurred during the last 3 years, detail of any social function organized by you during the last 3years and furnish detail of cash in hand during the last 3 years the assessee was asked to explain the reason why the unused huge cash fund leis with her so long period. In response to this notice neither the assessee attended nor filed any written reply in this regard before the ld. AO. 3.2 Further assessee was asked as to why she retain the said amounts three year duration in her pocket? The assessee did not reply to that query and not filed any supporting documentary evidences in her claim. In view of the above facts and discussion ITA No. 2/JPR/2025 Ritu Dhaka vs. ITO 5 made ld. AO made the addition of Rs. 21,61,000/- [ 16,35,000 + 5,26,000 ] u/s. 68 of the Act. 4. Aggrieved, from the said order of assessment, assessee has filed an appeal before the ld. CIT(A). The ld. CIT(A) after hearing the contention of the assessee dismissed the appeal of the assessee by giving the following findings on the issue:- “4. DECISION: 4.1 I have perused the assessment order and the submissions of the assessee. In this case, the assessee has deposited cash of Rs. 16,35,000/- in her bank account in Axis Bank during demonetization period. In addition to this, she has also deposited cash of Rs.5,26,000/- in the balance part of this financial year. The AO has held this cash of Rs.21,61,000/- to be unexplained and has added this sum to the returned income as the assessee was unable to explain the nature and source of this cash deposited in the bank account to the satisfaction of the AO. The assessee has stated that subsequently on 07.08.2019, the AO has passed a rectification order and has reduced the addition of Rs.17,99,000/-. 4.2 During appellate proceedings, the appellant she is a Government Teacher in Rajasthan drawing an annual salary of Rs 5,46,481/-. She has stated that she has maintained 7 bank accounts in different banks during the year. The sources of the cash deposits in the bank account is stated to be as under- 1. Cash withdrawn from bank account of Rs. 6,97,000/- in F.Y. 2014-15, 2015-16 & 2016-17 from her salary. 1. Out of mortgage loan of Rs. 15,00,000/- taken from Axis Bank used for purchase of land of Rs.8,30,600/- vide sale deed dated 12.03.2013; balance amount of Rs.6,36,400/- having been retained by her since March, 2013 till the demonetization period. ITA No. 2/JPR/2025 Ritu Dhaka vs. ITO 6 1. Agricultural income of Rs. 1,07,000/- of F.Y. 2014-15, 2015-16 & 2016-17. 1. Withdrawals of husband from bank account held jointly with husband of Rs.97,000/-. 4.3 The assessee has not furnished any reason why she held such a large amount of cash in hand right from March 2013 onwards which has now been deposited in bank account in F.Y. 2016-17, more particularly during the demonetization period. Also, the assessee has not furnished any details of house hold expenses for any year from FY 2012-13 to FY 2016-17 and the reasons for withdrawing cash in earlier years which was apparently not utilised but retained as cash in hand for many years, even though the assessee held as many as seven bank accounts. 4.4 In view of the above facts and discussion, it is held that the assessee has not been able to explain the nature and source of cash deposited in the bank account during the demonetization period and the balance part of the period. 4.5 I find no infirmity in the addition made by the Assessing Officer and therefore, the appeal filed by the appellant is dismissed. 5. In the result, appeal is dismissed.” 5. As the first appeal filed by the assessee was dismissed and therefore, feeling dissatisfied with that order of the ld. CIT(A) the assessee is in appeal before this tribunal on the grounds as reiterated herein above. In support of the grounds of appeal the ld. AR of the assessee has relied upon the following written submission:- Brief Facts & Arguments of the Case: ITA No. 2/JPR/2025 Ritu Dhaka vs. ITO 7 1. Appellant is a Government Teacher since 2005 (as around 11 years Govt. job) and during the year under consideration appellant had G.T.I. of Rs. 5,46,481/- & Agricultural Income of Rs. 42,000/- during the year under consideration. 2. Moreover, the husband of appellant is also in Govt. Job since 1999 (i.e. around 17yearsof govt. job) and having G.T.I. of Rs. 3,02,336/- And Agricultural income of Rs. 1,73,522/- during the year under consideration. 3. That appellant lives with her husband (both are government servants) and have 2 kids. Elder daughter Palakwas 13 years old and during the year under consideration,studied Class VIIth and her quarterly school fees was Rs. 9,000/-. Hence, annual fees was Rs. 36,000/-. Copy of fees receipts submitted during the assessment proceeding & approx Rs. 4,000/- other expenses. Younger kid Aditya was 4 year old. So, education expenditure is not incurred on younger kid. Hence, education expenditure are as follows:- (i). A.Y. 2017-18 - Rs. 40,000/-. (ii). A.Y. 2016-17 - Rs. 36,000/-. (iii). A.Y. 2015-16 - Rs. 33,000/-. (iv). AY. 2014-15 - Rs. 30,000/-. 4. That during the year under consideration (i.e. the year of demonetization) appellant deposited total cash in her Saving Bank Account, KCC and her Mortgage Loan Account as follows:- (i). 01.04.2016 to 07.11.2016 - Rs. 82,000/- (ii). 08.11.2016 to 31.12.2016 - Rs. 16,35,000/- (iii). 01.01.2017 to 31.03.2017 - Rs. 85,000/- TOTAL - Rs. 18,02,000/- 5. That the Ld. A.O. made addition entire cash deposit of Rs. 21,61,000/- against the actual cash deposit of Rs. 18,02,000/- as stated in above point No. 4. But, thereafter, on 07.08.2019, Ld. A.O. rectified assessment order u/s. 154 of the I.T. Act, 1961 & finally made addition of entire cash deposit of Rs. 17,99,000/- and ignored Rs. 3,000/-. 6. That the allegation made by Ld. A.O. for addition on 3rd Para from the bottom side of Page No. 2 of 3 of Assessment Order dated 29.07.2019, is as follows:- “Further for cross verification of the detail information, documents in which also mentioned that the assessee has made cash deposited of Rs. 16,35,000/- and other cash deposited in the accounts during the FY 2016-17 was withdrawal from their accounts which is palace on the record. Further, assessee was asked why the reason to retain the said amounts three year duration in her pocket? The assessee was not point out to this query and not filed any supporting documentary evidences in her claim.” ITA No. 2/JPR/2025 Ritu Dhaka vs. ITO 8 7. That the Ld. A.O. did not give any Show Cause Notice. So, the appellant came to know about the addition, when she got assessment order. 8. That in computation sheet the Ld. A.O. computed tax @ 60%, probably applied section115BBE of the I.T. Act 1961 without mentioning to impose the tax u/s. 115BBE and without giving SCN to impose tax u/s. 115BBE of the I.T. Act, 1961. 9. That the Ld. CIT(Appeals), NFAC dismissed the appeal and added one more allegation for addition (i.e. appellant has not furnished any details of household expenses). Arguments and reliance of case laws on additional legal grounds of appeal:- Ground No. 1 “That the Ld. A.O. has erred in Law & facts of the case to invoke Section 68 of the I.T. Act, 1961, as the appellant neither maintain any books of accounts nor the Ld. A.O. found any credited in the books of appellant. So, the invocation of Section 68 of the I.T. Act, 1961 is wrong and bad in Law. Kindly delete the addition.” (i) That the invocation of Section 68 of the I.T. Act, 1961 is wrong as appellant is a salaried employee and not maintain any kind of books of accounts. (ii) The Ld. A.O. nowhere mentioned how and why, he invoked the Section 68 for addition.? (iii) The Ld. A.O. has not issued any SCN that he is going to made addition u/s. 68 of the I.T. Act, 1961. (iv) The Ld. A.O. has not fulfilled the jurisdictional required to invoke Section 68 of the Act. (v) The Ld. A.O. did not stated which cash credit is unexplained for the addition. (vi) The appellant is relying on the following judgments, which are as follows:- 1. Judgment of Hon’ble Bombay High Court in case of CIT, Poona v. Bhaichand H. Gandhi, [1983] 53 COMPCAS 400 (BOM), Date of Order – 12.02.1982the relevant para of finding is as follows:- “5. As the Tribunal has pointed out, it is fairly well settled that when moneys are deposited in a bank, the relationship that is constituted between the banker and the customer is one of debtor and creditor and not of trustee and beneficiary. Applying this principle, the pass book supplied by the bank to its constituent is only a copy of the constituent's account in the books maintained by the bank. It is not as if the pass book is maintained by the bank as the agent of the constituent, not can it be said that the pass book is maintained by the bank under the instructions of the constituent. In view of this, the Tribunal was, with respect, justified ITA No. 2/JPR/2025 Ritu Dhaka vs. ITO 9 in holding that the pass book supplied by the bank to the assessee in the present case could not be regarded as a book of the assessee, that is, a book maintained by the assessee or under his instructions. In our view, the Tribunal was justified in the conclusions at which it arrived.” 2. Judgment of the co-ordinate Bench ofJaipur ITAT in case of Dr. VishanSwaroop Gupta v. ITO Ward 7(3), Jaipur, ITA No. 13/JP/2020 the relevant para of finding is as follows:- “9. After having gone through the facts and circumstances, we observe that credit in the ‘bank account’ of an assessee cannot be construed as a credit in the ‘books’ of the assessee, for the very reason that the bank account cannot be held to be the ‘books’ of the assessee. Though, it remains as a matter of fact that the ‘bank account’ of an assessee is the account of the assessee with the bank, or in other words the account of the assessee in the books of the bank, but the same in no way can be held to be the ‘books’ of the assessee. We have given a thoughtful consideration to the scope and gamut of the aforesaid statutory provision of Section 68, and are of the considered view that an addition made in respect of a cash deposit in the bank account of an assessee, in the absence of the same found credited in the ‘books’ of the assessee maintained for the previous year, cannot be brought to tax by invoking the provisions of Section 68 of the Act. Therefore, on this count itself the impugned addition made and sustained deserves to be deleted and we direct to delete the same. Since we have quashed the addition on the ground that no such addition could have been validly made U/s 68 of the Act, therefore, we refrain ourselves to decide the other grounds wherein the assessee has assailed on merits the additions sustained by the ld. CIT(A) In the result, appeal of the assessee is allowed.” The addition u/s. 68 is liable to be deleted. Ground No. 2 “That the Ld. A.O. has erred in Law & facts of the case in making addition without following the Principle of Natural Justice & without following the binding instruction of CBDT, instruction No. 20/2015, dated 29.12.2015. So, the addition is bad in law. Kindly delete the same.” The Ld. A.O. did not issue any SCN to make addition u/s. 68 of the Act, therefore the Ld. A.O. did not follow the guidelines of CBDT mentioned in CBDT instruction No. 20/2015, dated 29.12.2015. The relevant Para of CBDT instruction is as follows:- “4. The Board further desires that in all cases under scrutiny, where the Assessing Officer proposes to make additions or disallowances, the assessee would be given a fair opportunity to explain his position on the proposed additions/disallowances in accordance with the principle of natural justice. In this regard, the Assessing Officer shall issue an ITA No. 2/JPR/2025 Ritu Dhaka vs. ITO 10 appropriate show-cause notice duly indicating the reasons for the proposed additions/disallowances along with necessary evidences/reasons forming the basis of the same. Before passing the final order against the proposed additions/disallowances, due consideration shall be given to the submissions made by the assessee in response to the show-cause notice.” The appellant is relying on the following judgments, which are as follows:- 1. Judgment of Orissa High Court in case of ACIT v. M/s. Serajuddin, 454 ITR 312, order dated 15.03.2023, the relevant para of judgment is as follows:- “……24. The above manual is meant as a guideline to the AOs. Since it was issued by the CBDT, the powers for issuing such guidelines can be traced to Section 119 of the Act. It has been held in a series of judgments that the instructions under Section 119 of the Act are certainly binding on the Department. In Commissioner of Customs v. Indian Oil Corporation Ltd. 2004 (165) E.L.T. 257 (S.C.) the Supreme Court observed as under: \"Despite the categorical language of the clarification by the Constitution Bench, the issue was again sought to be raised before a Bench of three Judges in Central Board of Central Excise, Vadodara v. Dhiren Chemicals Industries: 2002 (143) ELT 19 where the view of the Constitution Bench regarding the binding nature of circulars issued under Section 37B of the Central Excise Act, 1944 was reiterated after it was drawn to the attention of the Court by the Revenue that there were in fact circulars issued by the Central Board of Excise and Customs which gave a different interpretation to the phrase as interpreted by the Constitution Bench. The same view has also been taken in Simplex Castings Ltd. v. Commissioner of Customs, Vishakhapatnam 2003 (5) SCC 528. The principles laid down by all these decisions are: (1) Although a circular is not binding on a Court or an assessee, it is not open to the Revenue to raise the contention that is contrary to a binding circular by the Board. When a circular remains in operation, the Revenue is bound by it and cannot be allowed to plead that it is not valid nor that it is contrary to the terms of the statute. (2) Despite the decision of this Court, the Department cannot be permitted to take a stand contrary to the instructions issued by the Board. (3) A show cause notice and demand contrary to existing circulars of the Board are ab initio bad (4) It is not open to the Revenue to advance an argument or file an appeal contrary to the circulars.\" ITA No. 2/JPR/2025 Ritu Dhaka vs. ITO 11 2. Judgment of Hon’ble Supreme Court in case of Commissioner of Customs v. M/s. Indian Oil Corporation, 2004, (3) SCC, 488, dated of order 17.02.2004, the relevant para of judgment is as follows:- “……….The decision in PanchMahal Steel (supra) does not allow an adjudicating officer to act in violation of the Circular issued under Section 151A. Incidentally the decision in PanchMahal (supra) was an ex-parte one in the sense that the importer was not represented when the matter was argued. Its failure to prefer an appeal could not in the circumstances mean that the issue had become final as far as all other importers are concerned. Moreover, there was no reference to the Circular nor any reason for coming to the conclusion that demurrage was includible in the value of the imported goods. We may mention here that the stand of the appellant that this Court had taken the view that demurrage was includible in Garden Silks (supra) both in the adjudication order and before the Tribunal appears to have been abandoned, in our opinion rightly, in the written notes of submission. Apart from the decision of the Constitution Bench in Dhiren Chemicals (supra), Garden Silks (supra) was a decision on landing charges. It did not construe the 1988 Rules. The circular on the other hand was issued on a re-examination of the issue in the light of the GATT Valuation principles as incorporated in the 1988 Rules. In this view it is not necessary for us to determine the further issue whether in the absence of Board circulars, demurrage would still be includible in the assessable value of the imported goods. For the purposes of these appeals, it is sufficient to hold, as we do, that demurrage was wrongly included by the adjudicating officer in the assessable value contrary to the directive of the CBEC at a time when the circular had not been withdrawn. For the reasons aforesaid, the appeals are dismissed with costs.” Therefore, the assessment order is illegal and void-ab-intion& deserves to be quashed. Ground No. 3 “That the Ld. A.O. has erred in Law & facts of the case by charging the special rate, without mentioning the fact of special rate of tax in assessment order and without mention section of special rate being invoked & why. So, the charging special rate of tax is wrong & bad in Law. Kindly direct to not charge special rate of tax.” ITA No. 2/JPR/2025 Ritu Dhaka vs. ITO 12 That without prejudice to the additional ground No. 1, 2 and ground No. 4, we submits that the Ld. A.O. has not issued specific SCN for charging special rate of tax u/s. 115BBE, the appellant is relying on the Judgment of Hon’ble ITAT, Jodhpur Bench in case of Smt. SurajKanwarDevra v. ITO, Ward 2(2), Udaipur, ITA No. 50/Jodh/2021, Date of Order – 23.11.2021. The relevant Para of judgment is as follows:- “ 16.………..the A.O. has not issued any Show Cause Notice before invoking the provision of Sec. 115BBE for taxing the income on higher rate. It was mandatory on the part of the AO to issue the specific show cause notice to this effect asking to the assessee as to why the income should not be taxed u/s. 115BBE before doing so. It is very settled legal position that a person (assessee) is entitled to opportunity to show cause as to why not the income of the assessee is determined and charged or taxed in the manner as proposed by the Ld. A.O. But, in the instant case no such type of opportunity had been provided but the AO has failed to do so, which is against the Principal of Natural Justice and against the Law. This Section 115BBE, is charging of tax at the higher rate and it cannot be applied directly without giving any show cause notice when the issue are disputed that whether the higher rate of tax applicable or not on the alleged income or the nature of income falls us. 68/69 and 115BBE.Hence it was mandatory on the part of the AO to issue show cause before invoking the provision u/s. 115BBE, in absence of the same the rate cannot be charged more than to normal rate of tax, if the addition if any sustained.” So, charging special rate u/s. 115BBE cannot be charged and kindly charge the normal tax rate even if the addition is sustained. Arguments and reliance of case laws on ground No. 4 of the appeal i.e. arguments on merits:- Ground No. 4 “That under the facts and circumstances of the case the Ld. National Faceless Appeal Centre (NFAC) has erred in law and facts in confirming the addition of Rs. 17,99,000/-imposed by the Ld. A.O. on account of unexplained cash deposit u/s. 68 of the I.T. Act, 1961which is wrong, unwarranted and bad in law. Kindly delete the same.” 1. That during the year under consideration (i.e. the year of demonetization) appellant deposited total cash in her Saving Bank Account, KCC and her Mortgage Loan Account as follows:- (i). 01.04.2016 to 07.11.2016 - Rs. 82,000/- (ii). 08.11.2016 to 31.12.2016 - Rs. 16,35,000/- (iii). 01.01.2017 to 31.03.2017 - Rs. 85,000/- TOTAL - Rs. 18,02,000/- ITA No. 2/JPR/2025 Ritu Dhaka vs. ITO 13 2. That the Ld. A.O. made addition entire cash deposit of Rs. 21,61,000/- against the actual cash deposit of Rs. 18,02,000/- as stated in above point No. 4. But, thereafter, on 07.08.2019, Ld. A.O. rectified assessment order u/s. 154 of the I.T. Act, 1961 & finally made addition of entire cash deposit of Rs. 17,99,000/- and ignored Rs. 3,000/-. 3. The sources of entire cash deposit is placed insubmitted Cash Flow Statement for the period from 01.04.2012 to 31.03.2017 (Paper Book Page No. 21 to 26). 4. The household expenses met out by the cash withdrawal from husband of appellant. The husband of appellant is also a Govt. servant. Cash withdrawal by the husband is shown in Cashflow statement for the period from F.Y. 2013-14 to F.Y. 2016-17 for household expenses (Paper Book page No. 116-120). There is only Rs. 49,000/- cash deposit in the bank account of husband during the demonetization period. 5. The Ld. A.O. did not bring any finding to use the cash balance available with the appellant (the source of cash deposit is, earlier withdrawal from the bank accounts of appellant, narrated in cash flow statement,Paper Book Page No. 21 to 26). 6. That the addition made by Ld. A.O. was only on the basis of presumption, assumption, on the basis of suspicious& without any supporting material. Appellant is relying in support of her contention the following judgments, which are as follows:- 1. Judgment of Hon’ble High Court of Orissa in case of ACIT, Circle -1(2) v. Ms/. Serajuddin& Co., ITA No. 39 to 45 of 2022, order dated 15.03.2023. “16. This cash flow statement furnished by the assessed was rejected by the Assessing Officer which is on the basis of suspicion that the assessed must have spent the amount for some other purposes. The orders of Assessing Officer as well as Commissioner of Income Tax are completely silent as to for what purpose the earlier withdrawals would have been spent. As per the cash book maintained by the assessed, a sum of Rs. 10,000/- was being spent for household expenses every month and the assessed has withdrawn from bank a sum of Rs. 2 lacs on 4th December, 2000 and there was no material with the Department that this money was not available with the assessed. It has been held by the Tribunal that in the instant case the withdrawals shown by the assessed are far in excess of the cash found during the course of search proceedings. No material has been relied upon by the Assessing Officer or Commissioner Income Tax(A) to support their view that the entire cash withdrawals must have been spent by the assessed and accordingly, the Tribunal rightly held that the assessment of Rs. 2.5 lacs is legally not sustainable under Section 158BC of the Act and the same was rightly ordered to be deleted.” 2. Judgment of Hon’ble ITAT, Jodhpur Bench in case of Smt. Krishna Agarwal v. ITO Ward-1, Pali, ITA No. 53/JODH/2021, Date of Order – 07.09.2021 ITA No. 2/JPR/2025 Ritu Dhaka vs. ITO 14 “15. We further note that the cash withdrawals in the earlier two years have not been disputed by the Revenue and only reason why the explanation of the assessee that cash deposits in the year under consideration is out of earlier years withdrawals has not been accepted is that keeping huge cash at home for such a long period is beyond any imagination. In this regard, we believe that there cannot be any standard yardstick which can be applied and what needs to be examined is the reasonability of the explanation so furnished by the assessee on the touchstone of facts and circumstances of each case. In the instant case, it has been submitted that the cash was withdrawn for the purposes of purchase of another property by the assessee for her son however, the transaction couldn’t fructify and as a result, the assessee decided to re- deposit the amount in the bank account. In an ideal situation, such an explanation is expected to be supported by some documentary evidence however, mere absence of supporting documentation cannot be a reason enough to allege any malafide in the explanation so submitted especially where the assessee has explained and duly disclosed the source of deposits in the bank account out of which the withdrawals have been made and has thus established the necessary linkage and availability of cash in hand. The various decisions of the Coordinate Benches cited at the Bar by the ld AR also lays down a broad proposition that mere time gap between withdrawals and deposits cannot be a sole basis for rejecting the explanation of the assessee regarding availability of cash in hand where there is no material that amount so withdrawn has been utilized somewhere else and thus supports the case of the assessee In the entirety of facts and circumstances of the case, we believe that there is no justifiable basis to hold that the explanation so furnished by the assessee cannot be accepted and find the explanation so furnished is reasonable, appropriate and satisfactory in the facts and circumstances of the present case and hereby direct the addition so made be deleted.” Ground No. 5 General Ground That the appellant craves the permission to add to or amend to any of the above grounds of appeal or to withdraw any of them.” 5.1 To support the contention so raised in the written submission ld. AR of the assessee filed a detailed paper book having following evidence / records : S. No. Particular Page No. ITA No. 2/JPR/2025 Ritu Dhaka vs. ITO 15 1 Copy of gist of notices issued during assessment proceeding. 1-2 2 Copy of Notice u/s. 142(1), dated 17.05.2019. 3-4 3 Copy of SCN dated 10.06.2019. 5 4 Copy of Notice u/s. 142(1), dated 27.06.2019. 6-7 5 Copy of reply dated 14.09.2018. 9 6 Copy of reply dated 08.10.2018. 10 7 Copy of reply along with documentary evidence dated 07.06.2019. 8 8 Copy of reply along with documentary evidence dated 19.06.2019. 11-12 9 Copy of reply along with documentary evidence dated 04.07.2019. 13 10 Copy of ITR-V of appellant for A.Y. 2017-18. 14 11 Copy of Computation of Total Income of appellant for A.Y. 2017-18. 15-16 12 Copy of Form No. 16 of appellant for A.Y. 2017-18. 17-20 13 Copy of Cash Flow Statement of appellant for the period from 01.04.2012 to 31.03.2017 21-26 14 Copy of Bank account statements of appellant & their summary:- (i). SBBJ -6700 (Saving Bank Account) (ii). AXIS Bank Loan Sanction Letter. (iii). Copy of Agricultural land Purchase Registry. (iv). AXIS Bank- 9167 (Saving Bank Account). (v). BOB – 2295 (Saving Bank Account) (vi). BOB – 0234 (KCC Account) (vii). MGB – 3248 (Saving Bank Account) 27-52 53 54-63 64-72 73-76 77-80 81-83 15 Copies of ITR-V of appellant for A.Y. 2012-13 to A.Y. 2016-17. 84-88 16 Copies of From 16 of appellant from A.Y. 2012-13 to A.Y. 2016-17 89-98 17 Copy of Jan Aadhar Card of appellant. 99 18 Copy of Fees slips of Kids. 100-101 19 Copies of documents of husband of appellant Shri Shiv Karan Singh:- (i). Copy of ITR-V of Shiv Karan Singh from A.Y. 2017- 18 to A.Y. 2013-14. (ii). PNB – 4734 (Salary Bank Account) (iii). Copy of year wise cash Flow Statement from F.Y. 2013-14 to F.Y. 2016-17. 102-105 106-115 116-120 ITA No. 2/JPR/2025 Ritu Dhaka vs. ITO 16 5.2 Ld. AR of the assessee also serviced the following judicial precedent to support the contention raised in the written submission: - 6. In addition to the written submission so filed by the ld. AR of the assessee he vehemently argued that the assessee is teacher and has submitted a detailed cash flow statement (page 21-26) S. No. Particular Page No. 1 Judgment of Hon’ble Supreme Court in case of National Thermal Power Co. Ltd. v. CIT, 1996 SC 738, Date of Order 04.12.1996. 1-3 2 Judgment of Hon’ble Bombay High Court in case of CIT, Poona v. Bhaichand H. Gandhi, [1983] 53 COMPCAS 400 (BOM), Date of Order – 12.02.1982. 4-5 3 Judgment of Hon’ble ITAT, Jaipur Bench in case of Dr. Vishan Swaroop Gupta v. ITO Ward 7(3), Jaipur, ITA No. 13/JP/2020 6-17 4 CBDT Instruction No. 20/2015, dated 29.12.2015. 18-19 5 Judgment of Hon’ble High Court of Orissa in case of ACIT, Circle -1(2) v. Ms/. Serajuddin & Co., ITA No. 39 to 45 of 2022, order dated 15.03.2023. 20-36 6 Judgment of Delhi High Court in case of CIT v. Shri Kulwant Rai, [2007] 291 ITR 36 (DELHI), Date of order – 13.02.2007. 37-41 7 Judgment of Hon’ble ITAT, Jodhpur Bench in case of Smt. Suraj Kanwar Devra v. ITO, Ward 2(2), Udaipur, ITA No. 50/Jodh/2021, Date of Order – 23.11.2021. 42-66 8 Judgment of Hon’ble ITAT, Jodhpur Bench in case of Smt. Krishna Agarwal v. ITO Ward-1, Pali, ITA No. 53/JODH/2021, Date of Order – 07.09.2021 67-85 9 Judgment of Hon’ble ITAT, Jaipur Bench in case of Mahendra Kumar v. ITO, Circle (Intl Tax), ITA No. 226/JP/2021, Date of Order – 23.05.2022 86-112 10 Judgement of Hon’ble Supreme Court in case of CIT, Ernakulam v. P.K. Noorjahan, AIT 1999 SC 1600, date of Order – 15.01.1997 113-114 ITA No. 2/JPR/2025 Ritu Dhaka vs. ITO 17 which proves the availability of the fund. There is no other source of this government employee. Not only that relying on decision of Bhaichand Gandhi even the bank statement cannot be considered as books and thereby the invocation of provision of section 68 was in correct in the case of the assessee. The assessee also submitted that her husband is also working and has also submitted that his cash balance was available with the assessee and therefore, even on merits the assessee has sufficient source to deposit the amount into the bank account. 7. Per contra, Ld. DR relied upon the findings recording in the order of Ld. CIT(A). He vehemently stated that it was not practicable to keep the cash on hand by the assessee since 2013 onward and kept at home. The reasons given were not acceptable and even considering the nature of the job the assessee perform the cash on hand to that extent is also not convincing to be kept on hand and therefore, the addition so made is required to sustained. 8. We have heard the rival contentions and perused material available on record. Vide ground no. 1 to 3 which were raised as additional ground challenges the addition on technical ground and ground number 4 relates to the addition ITA No. 2/JPR/2025 Ritu Dhaka vs. ITO 18 on merits of the case. Since all the grounds relates to the one addition disputed by the assessee for an amount of Rs. 17,99,000/- being the amount of cash deposited by the assessee in her bank account. The brief facts related to the disputes are that for the year under consideration the assessee has filed the return of income declaring total income of Rs. 3,45,950/- on 22.07.2017. This case was selected for Scrutiny under CASS system. Statutory notices were issued, and the assessee filed submission in response to those notices. While examining the record the ld. AO noted that the assessee has deposited Rs. 16,35,000/- in cash during demonetization. While explaining the source of money the assessee stated that she has taken a mortgage loan of Rs.15,00,000/- deposited in Axis Bank account No.913010008949167 and withdrawal cash from that loan account. Out of loan amount Rs.8,63,830/- invested and balance amount Rs. 6,36,170/- was made available as cash on hand. As regards the remaining amount of Rs. 9,98,830/- the same was stated to be saving out of salary income earned by her. She also stated that she deposited cash of Rs.5,26,000/- in her bank account during the financial year 2016-17 for which it was submitted that the same ITA No. 2/JPR/2025 Ritu Dhaka vs. ITO 19 was out of withdrawal from other accounts. In light of that fact ld. AO asked the assessee to show cause as to why the cash deposit of Rs. 16,35,000/- & other cash deposited of Rs. 5,26,000/- be not considered as income. In response assessee filed written submission on 19.06.2019. Thereafter ld. AO also called for detail of investment made during the last 3 years and to disclose source of income, detail of house hold expenses and other expenses incurred during the last 3 years, detail of any social function organized by the assessee during the last 3years and furnish detail of cash in hand during the last 3 years the assessee. The assessee was also asked to explain the reason as to why the unused huge cash fund leis with her so long period. In response to this notice neither the assessee attended nor filed any written reply. Further assessee was asked as to why she retain the said amounts three year duration in her pocket? The assessee did not reply to that query and not filed any supporting documentary evidence in support of her claim. In light of that of the case ld. AO made the addition of Rs. 21,61,000/- [ 16,35,000 + 5,26,000 ] u/s. 68 of the Act. The assessee carried the matter before the ld. CIT(A). In the meanwhile ld. AO on 07.08.2019 revised the addition amount by ITA No. 2/JPR/2025 Ritu Dhaka vs. ITO 20 Rs. 17,99,000/. While dealing with the appeal of the assessee for the sustained addition he noted that assessee is a Government Teacher in Rajasthan drawing an annual salary of Rs 5,46,481/-. She has stated that she has maintained 7 bank accounts in different banks during the year. The sources of the cash deposits in the bank account is stated to be from Cash withdrawn from bank account of Rs. 6,97,000/- in F.Y. 2014-15, 2015-16 & 2016-17 from her salary. She also obtained a mortgage loan of Rs. 15,00,000/- taken from Axis Bank used for purchase of land of Rs.8,30,600/- vide sale deed dated 12.03.2013; balance amount of Rs.6,36,400/- having been retained by her since March, 2013 till the demonetization period. He also stated to have Agricultural income of Rs. 1,07,000/- of F.Y. 2014-15, 2015-16 & 2016- 17 and available withdrawal from her husband’s bank account held jointly for an amount of Rs.97,000/-. Ld. CIT(A) noted that the assessee has not furnished any reason why she held such a large amount of cash in hand right from March 2013 onwards which has now been deposited in bank account in F.Y. 2016-17, more particularly during the demonetization period. Also, the assessee has not furnished ITA No. 2/JPR/2025 Ritu Dhaka vs. ITO 21 any details of house hold expenses for any year from FY 2012-13 to FY 2016-17 and the reasons for withdrawing cash in earlier years which was apparently not utilised but retained as cash in hand for many years, even though the assessee held as many as seven bank accounts. Therefore, ld. CIT(A) holds a view that assessee has not been able to explain the nature and source of cash deposited in the bank account during the demonetization period and the balance part of the period and thereby he confirmed the addition in the hands of the assessee for an amount of Rs. 17,99,000/-. Before us as is argued vide additional ground that the bank pass book is not books of account and thereby the ld. AO making the addition u/s 68 is not correct. Even alternatively the assessee has already explained by filling a cash flow statement that assessee and her husband both the are government employee and salaried person having no other source of income other then salary income. While explaining the source of money the assessee stated that she has taken a mortgage loan of Rs.15,00,000/- deposited in Axis Bank account and withdrawal of cash from that loan account and out of that amount Rs.8,63,830/- invested and balance amount Rs. ITA No. 2/JPR/2025 Ritu Dhaka vs. ITO 22 6,36,170/- was made available as cash on hand. As regards the remaining amount of Rs. 9,98,830/- the same was stated to be saving out of salary income earned by her and her Husband. She also stated that she deposited cash of Rs.5,26,000/- in her bank account during the financial year 2016-17 for which it was submitted that the same was out of withdrawal from other accounts and therefore, that addition of current year transaction cannot be considered as unexplained. The bench noted that the ld. AO after submission of cash flow he further called for the details of last three year for investment made, household expenditure incurred, abroad travelling and details of the cash on hand. Those details were placed on record with the AO vide letter dated 04.07.2019 [ APB-13]. There is no comment on that information in the orders of the lower authority and thereby rejected the explanation of the assessee merely stating that “Submission and documentary evidence filed by the assessee is not genuine and factual. Thus, the explanation of the assessee though supported by evidence was not considered and there is no reasons as to making the whole cash deposit as unexplained. Looking to the overall explanation so furnished by the assessee we are of the considered view that the assessee has placed on record all the evidence so as ITA No. 2/JPR/2025 Ritu Dhaka vs. ITO 23 to justify the cash available with her where she submitted even the return of income of her Husband, loan documents, expenditure incurred on kids education etc. which are sufficient records to prove the deposit of cash into the bank account but the same were rejected in Lock, Stock and Barrel which is not correct as no addition of income be made based on the surmises and conjectures. The bench also noted from the cash flow statement so filed by the assessee that Rs. 14,84,330/- was opening cash balance, thereby left the amount of Rs. 3,14,670/- was part of income of the assessee and that of her husband and agricultural income cannot be considered as unexplained. As regards the opening balance on the first day or carried forward from the preceding year cannot be added in this year. We get the support of this contention from the decision of our jurisdictional high court in the case of Commissioner of Income-tax v. Parmeshwar Bohra, 131 Taxman 145 (Rajasthan) wherein the jurisdictional high court held that; “7. It appears that the Tribunal has considered the issue regarding assessability of the capital while considering the assessee’s appeal ITA 71(JDP)/99 for the assessment year 1993-94 by order dated 6-12-2001 whereby the Tribunal held that it is not a case of introduction of cash credit but it is a case of unexplained investment under section 69 of the Act of 1961 and the appropriate previous year for inclusion is the relevant financial year and, therefore, the opening capital account ITA No. 2/JPR/2025 Ritu Dhaka vs. ITO 24 cannot be added as an unexplained investment under section 69 of the Act of 1961 for the assessment year 1993-94. The Tribunal also held that the genuineness of the capital introduction has already been adjudicated upon by the assessing authority for the appropriate financial year relevant to assessment year 1992-93. The Tribunal also took note of the fact that the order passed by the assessing authority for the assessment year 1993-94 on the basis of notice under section 148 dated 17-6-1997 has already been quashed by the order dated 6- 12-2001 in the same ITA No. 71 (JDP)/99. Therefore, on the basis of the above decision dated 6-12-2001, the appeal of the assessee was allowed by the Income Tax Appellate Tribunal. Nothing has come on record what happened to the order dated 6-12-2001 and whether the said order of the Tribunal was ever challenged by the revenue or not. When the revenue itself has accepted the order dated 6-12-2001 wherein it has been held by the Tribunal that it is a case of unexplained investment under section 69 of the Act of 1961 and the appropriate previous year for inclusion is the relevant financial year and its genuineness has already been adjudicated upon by the assessing authority for the appropriate financial year, i.e., 1992-93 (sic) then how the order of the assessing authority can be said to be erroneous or prejudicial to the interest of the revenue. Since the Income Tax Appellate Tribunal has decided the appeal on the basis of the decision dated 6-12-2001, therefore, there appears to be no illegality in the order passed by the Income Tax Appellate Tribunal.” We note from the copy of cash book filed by the assessee that the assessee has out of the earlier year saving has shown opening cash of Rs. 14,84,330/- which is also supported by the various year accumulated income shown by the assessee since 01.04.2012. The details so submitted has never been disputed even before us when the appeal was argued. Thus, considering the discussion so ITA No. 2/JPR/2025 Ritu Dhaka vs. ITO 25 recorded herein above we do not find any reason to sustain the addition and thereby direct the ld. AO to delete the same. Based on this observation the appeal of the assessee is allowed. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 01/04/2025. Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBkSM+ deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judcial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 01/04/2025 *Santosh vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. vihykFkhZ@The Appellant- Ritu Dhaka, Jaipur. 2. izR;FkhZ@ The Respondent- ITO, Ward-4(4), Jaipur. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur. 6. xkMZ QkbZy@ Guard File { ITA No. 2/JPR/2025} vkns'kkuqlkj@ By order lgk;d iathdkj@Asst. Registrar ` "