SEEMA DEVI JAIN,NEW DELHI V. ACIT CIRCLE 50(1), NEW DELHI

ITA 3598/DEL/2024

AI Insights

The case involves Seema Devi Jain, who appealed against the order of the CIT(A) confirming an addition of Rs. 10,00,000 to her income for the Assessment Year 2017-18, under section 69A of the Income Tax Act, due to unexplained cash deposits during the demonetization period. The A.O. had initially made this addition, which was upheld by the CIT(A). The Tribunal, however, found that the assessee had adequately demonstrated the source of the cash deposits through a detailed cash flow statement and other records, which were not disputed by the A.O.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 42172 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAHIL KUMAR BANSAL
• Assessee Lawyers: MUKESH GUPTA
• Keywords: Deemed to accrue or arise in india; Application of stay
• Section: 143(3); 69A; 145(3)

Judgement Text

" 1 ITA No. 3598/Del/2025 Seema Devi Jain Vs. ACIT IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI BENCH ‘G’ NEW DELHI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER ITA No. 3598/DEL/2024 (A.Y. 2017-18) Seema Devi Jain 39, Pusa Road, New Delhi PAN: ADYPJ5280G Vs. ACIT Circle 50(1) Civic Centre, Minto Road, New Delhi Appellant Respondent SA No. 09/DEL/2025 (A.Y. 2017-18) Seema Devi Jain 39, Pusa Road, New Delhi PAN: ADYPJ5280G Vs. ACIT Circle 50(1) Civic Centre, Minto Road, New Delhi Appellant Respondent Assessee by Sh. Mukesh Gupta, CA Revenue by Sh. Sahil Kumar Bansal, Sr. DR Date of Hearing 19/02/2025 Date of Pronouncement 19/03/2025 ORDER PER YOGESH KUMAR, U.S. JM: The present appeal and Stay Application are filed by the Assessee against the order of the Commissioner of Income Tax Appeal[‘Ld. CIT(A)’ for short] dated 29/07/2024 for the Assessment Year 2017-18. 2. The Grounds of appeal are as under:- “1. Whether on the facts and in the circumstances of the case the Ld. CIT (A) has grossly erred in law and on facts in confirming the addition of Rs. Ten lakh u/s 69A of the Act on 2 ITA No. 3598/Del/2025 Seema Devi Jain Vs. ACIT account of cash deposited during demonetization period by ignoring that the cash deposits in the bank have been made out of cash balance available as per cash book which has neither been found to be incorrect nor rejected u/s 145(3) of the Income Tax Act. 2 Whether on the facts and in the circumstances of the case the Ld. CIT(A) has grossly erred in law and on facts in confirming the demand of Rs. One lakh fifty thousand on account of surcharge @ 25% of tax and by charging education cess etc. amounting to Rupees Two lakh sixteen thousand eight hundred twenty nine as the charging of surcharge and education cess is not applicable on such deemed income as per section 115BBE of the Act. 3. Brief facts of the case are that, the Assessee filed return of income declaring income of Rs. 1,93,75,760/-. The case was selected for ‘complete scrutiny’ through CASS on the issues of ‘Sales turnover/receipts, cash deposit during demonetization period, low income from other sources as compared to large value fixed deposits and receipt of large foreign remittance’. The Assessment order came to be passed u/s 143(3) of the Income Tax Act, 1961 (‘Act’ for short) Act by making addition of Rs. 10,00,000/- u/s 69A r.w.Section 115BBE on the ground that the Assessee could not gave proper justification for the source of cash deposited during the demonetization period. Aggrieved by the assessment order dated 16/12/2019, the Assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 29/07/2024 dismissed the Appeal filed by the Assessee. As against the order of the 3 ITA No. 3598/Del/2025 Seema Devi Jain Vs. ACIT Ld. CIT(A) dated 29/07/2024, the Assessee preferred the presentAppeal on the grounds mentioned above. 4. The Ld. Counsel for the Assessee submitted that the Ld. CIT(A) erred in upholding the addition of Rs. 10,00,000/- made by the A.O. u/s 69A of the Act on account of cash deposited during the demonization period by ignoring the fact that, the cash deposited by the Assessee in the bank account have been made out of the cash balance available as per cash book which has neither been found to be incorrect nor rejected u/s 145(3) of the Act. Further, the Ld. Assessee's Representative also produced cash flow statement to substantiate the contention of the Ld. Assessee's Representative. Thus, sought for allowing the Appeal. 5. Per contra, the Ld. Departmental Representative vehemently contended that though the A.O. has accepted the contention of the Assessee that the Assessee has withdrawn total Rs. 30,00,000/- which might have been used when demonetization announced, however, the Assessee failed to prove the reasonable and cogent explanation regarding the other withdrawals made on the dates preceding to such deposits. Therefore, by relying on the orders of the Lower Authorities sought for dismissal of the Appeal of the Assessee. 4 ITA No. 3598/Del/2025 Seema Devi Jain Vs. ACIT 6. We have heard both the parties and perused the material available on record. The Ld. A.O. in the assessment order observed that the Assessee withdrew Rs. 20,00,000/- on 13/10/2016 and Rs. 10,00,000/- on 25/10/2016 which might have been deposited when the demonetization was announced. However, the A.O. doubted the transaction of withdrawal of amount to Rs. 10,00,000/- preceding the above mentioned dates, accordingly made addition. It is the case of the Assessee that, the Assessee was having sufficient cash in hand to deposit during the demonization to substantiate the same, the Assessee has produced the chart which reads as under:- Opening Cash in hand as on 01.04.2016 20,57,064.00 Total cash withdrawal from bank from 01.04.2016 to 08.11.2016 60,00,000.00 Total Cash in hand 80,57,064.00 Less: cash deposited during pre demonetization 10,00,000.00 70,57,064.00\" cash expenses from 01.04.2016 to 08.11.2016 8,07,800.00 Total Cash in hand as on 08.11.2016 62,49,264.00 Less: cash deposited during demonetization 40,00,000.00 Cash available after demonetization 30,57,064.00 Cash withdrawn from bank (P23) on 13/10/2016 20,00,000.00 on 25.10.2016 10,00,000.00 on 24.08.2016 10,00,000.00 on 13.06.2016 15,00,000.00 5 ITA No. 3598/Del/2025 Seema Devi Jain Vs. ACIT 7. The Ld. A.O. has agreed to the claim of the Assessee regarding the withdrawal total sum of Rs. 30,00,000/- prior to the date of demonetization and availability of sufficient cash in hand. The Assessee has also produced cash book before the A.O. which is having cash in hand Rs. 62,49,264/- as on 08/11/2016 afterconsidering the cash expenses of Rs. 8,07,809/- from 01/04/2016 to 08/11/2016. Considering the fact that the Assessee has withdrawn the sufficient amount prior to the demonetization which is very well reflected in the statement of account and the same has not been disputed by the A.O. and not found the cash book as incorrect, thusin view of the above facts and circumstances, A.O. should not have made the addition. In our considered opinion, the Ld. CIT(A) has committed error in upholding the addition made by the A.O. Accordingly, we allow the Grounds of appeal of the Assessee by deleting the addition of Rs. 10,00,000/- made by the A.O. which has been upheld by the Ld. CIT(A). 8. In the result, the Appeal of the Assessee is allowed. 6 ITA No. 3598/Del/2025 Seema Devi Jain Vs. ACIT 9. Since we have decided the main appeal, the Stay Application No. 09/Del/2025 becomes in-fructuous. Order pronounced in the open court on 19th March, 2025 Sd/- Sd/- (S. RIFAUR RAHMAN) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 19.03.2025 R.N, Sr.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "