SH SANJAY BANSAL ,MORENA V. A.C.I.T (CENTRAL), GWALIOR

ITA 31/AGR/2022

AI Insights

The case involves Sanjay Bansal, the proprietor of Bharat Veg. Oils Trade Co., who appealed against the order of the CIT(Appeals) which partly confirmed the addition of Rs. 71,44,045 to his income for the Assessment Year 2012-13. The addition was initially made by the Assessing Officer after discovering unexplained credits in a bank account linked to Bansal. The CIT(Appeals) reduced the initial addition but upheld the majority of it, leading to Bansal's appeal to the Tribunal. The Tribunal found that the CIT(Appeals) had thoroughly examined the evidence and correctly applied the law in confirming the addition.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312565 (ITAT-AGRA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: misc
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GWALIOR
• Assessee Lawyers: HOLDING
• Keywords: Business income; Unexplained cash credit; Onus to prove
• Section: 147; 148; 143(3); 69; 40A(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE: SMT. ANNAPURA GUPTA, ACCOUNTANT MEMBER AND SHRI SUNIL KUMAR SINGH, JUDICIAL MEMBER ITA No.31/Agr/2022 Assessment Year: 2012-13 Sanjay Bansal, Prop. Bharat Veg. Oils Trade Giwaji Ganj, Morena (MP) PAN: AGHPB8713A (Appellant) M/s.Vs.ACIT (Central), Co., Assessee by Department by Gwalior. None Sh. Shailendra Srivastava, Sr. DR Date of hearing (Respondent) Date of pronouncement ORDER Per Sunil Kumar Singh, Judicial Member: 26.03.2025 wherein learned CIT(A) has partly allowed assessee's appeal. 29.04.2025 This appeal has been preferred by assessee against the impugned order dated 21.02.2022 passed in Appeal no. CIT(A-3, BhopallT 10924/2019-20 by the Ld. Commissioner of Income- tax(Appeals)-3, Bhopal [hereinafter referred to as the \"CITAY] u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as \"Act\"] for the Assessment Year [A.Y] 2012-13, ITA No. 31/Agr/ 2022 2. Brief facts relating to appeal state that assessee filed his return of income for A.Y. 2012-13 declaring total income of Rs.4,22,200/-. Assessee stated to be the proprietor of M/s. Bharat Veg. Oils Trade Co. It was also stressed that the assessee operated account No. 9028201000000170 in Bank of India in the name of M/s. G.S. Trading Co., proprietor of which was stated to be the assessee. Aforesaid account and its receipts were not mentioned by the assessee in his return. To verify the source of credits aggregating to Rs.91,06,669/- found in the said account, after recording reasons to believe, learned Assessing Officer found that income has escaped assessment for relevant assessment year 2012-13 and after obtaining the sanction from PCIT, Central Bhopal, notice u/s. 148 was issued and served upon the assessee. Reasons recorded were also provided to the assessee during the cOurse of assessment proceedings. In response to notice u/s. 148 of the Act, assessee filed return of income on 22.07.2019 declaring income at Rs.4,53,340/-. The difference in the total income was explained to be attributable to the net profit of Rs.31,139/- derived from M/s. G.S. Trading Co. Statutory notices were issued and after considering assessee's detailed submission in respect of aforesaid credits, the break-up of Rs.91,09,669/- was furnished by the assessee during the assessment proceedings. Further, details of advance of Rs.5,00,000/- in two parts were also furnished, which are part of the assessment order. The assessee 2|Page basically submitted that he made cash deposits in the financial year 2011-12 in respect of the sale proceeds of business of trading of grains and the source of cash deposited was business receipts. Learned Assessing Officer was not satisfied with the submissions of the assessee by holding that the pattern of transaction in the bank account do not reflect the nature of business as there are frequent deposits and withdrawals, which are not normaly found in the accounts of traders. Secondly, assessee failed to disclose his account number in his audited financial statement. Concluding that the assessee deliberately concealed the bank account and the cash deposited into the referred account, the Assessing Officer added the aforesaid amount to the income of the assessee. ITA No. 31/Agr/2022 3. Assessee filed first appeal before learned CIT(Appeals) who has very exhaustively passed the impugned order in 60 pages and considered all the submissions of the assessee in the tabulated form and otherwise, which need not to be repeated again for the sake of brevity. However, learned CIT(Appeals) partly allowed assessee's appeal confirming the addition only to the extent of Rs.71,44,045/- as against addition of Rs.91,06,669/-. 4. Assessee is in appeal before the Tribunal on the following grounds \"1.Because in any view, the impugned additions confirmed by CIT (A) (Quasi-Judicial Authority) of Rs 71,44,045/-: 3| Page 1 2 Rs. 5,00,000/- for so called unexplained deposit in Bank of India u/s 69 of the I.T. Act Rs. 57,00,000/ for so called unexplained Cash deposit in Bank Account u/s 69 of the I.T. Act Rs. 9,44,045/- for so called Cash Purchases and disallowable expenditure uls 40A(3) read with Rule 6DD of the 1.T. Act Rs. 71,44,045/ ITA No. 31/Agr/2022 is grossily arbitrary, highly unjust, unwarranted capricious, wrong. illegal, bad in facts & law. 2. Because in any view, the Assessment Order dt. 21.12.2019 passed u/s 147 read with section 143(3) of the LT. Act as confirmed by CIT (A) vide Order dt. 21.02.2022 confirming the impugned addition of Rs 71,44,045/-made on merely assumptions, presumptions, surmises & conjectures is wrong, illegal and bad in law. 16.03.2012 03.02.2012 3.1 Because in any view, the impugned addition as confirmed by CIT (A) of Rs 5,00,000/- (out of Rs. 71,44,045/-) of following deposits in Bank of India Account No. 902820100000170: Om Sai Trading Co. Anil Kumar Total Rs.3,00,000/ Rs.2,00,000/ Rs.5,00,000/ u/s 69 of the L.T. Act in mechanical, summary & brief manner without appreciating & brushing aside the Nature of transaction of Advance received for supply of goods, that too refunded in this year itself and categorically evidence furnished. The addition made on merely assumptions, presumptions, surmises & conjectures is grossly arbitrary, highly unjust, unwarranted capricious, wrong, illegal, bad in facts & law. 3.2 Because in any view, impugned addition of Rs 5,00,000/- has been confirmed u/s 69 of the L.T. Act. The Appellant has duly discharged the \"burden to prove\" in the peculiar facts & evidence. The \"Onus\" u/s 69 is on the Revenue treating it as Income. 4| Page ITA No. 31/Agr/2022 The \"Judgments\" quoted & relied have been rejected without, considering, touching, discussing and even refuting it, how they are not applicable, which is highly perverse, wrong, illegal and bad in law. 4.1 Because in any view, the impugned addition as confirmed by CIT (A) of Rs 57,00,000/- (out of Rs. 71,44,045/-) of Cash deposit in Bank u/s 69 of the LT. Act in mechanical, summary & brief manner without appreciating & brushing aside the Nature of transaction and without considering and appreciating that these are the banking transactions of Cash deposited from the Cash available as per Cash Book entered in the regular Books of Account duly Audited u/s 44AB of the LT. Act (the acceptance of Books of Accounts is not in dispute). The Nature of Cash deposit in Bank Account stands verified. The addition made on merely assumptions, presumptions, surmises & conjectures is grossly arbitrary, highly unjust, unwarranted capricious, wrong, illegal, bad in facts & law. 4.2 Because in any view, impugned addition of Rs 57,00,000/- has been confirmed u/s 69 of the I.T. Act. The Appellant has duly discharged the \"burden to prove\" in the peculiar facts & evidence. The \"Onus\" u/s 69 is on the Revenue treating it as Income. The \"Judgments\" quoted & relied have been rejected without, considering, touching, discussing and even refuting it, how they are not applicable, which is highly perverse, wrong, illegal and bad in law. 5.1 Because in any view, the impugned addition confirmed by CIT (A) of total Rs 9,44,045/- (out of Rs. 71,44,045/-) for so called Cash Purchases and disallowable expenditure u/s 40A(3) read with Rule 6DD of the 1.T. Act in mechanical, summary & brief manner without appreciating & brushing aside the Nature of transaction in the peculiar facts & circumstances, and the evidence furnished. The addition made on merely assumptions, presumptions, surmises & conjectures and grossly arbitrary, highly unjust, unwarranted capricious, wrong, illegal, bad in facts & law. 5.2 Because in any view, the Confirmation Letters as Afidavits has been rejected without even verifying the identity of the payee nature & genuineness of the transactions as stands proved. The Appellant has duly ischarged the \"burden to prove\" in the peculiar facts & evidence. 5|Page 5 6. ITA No. 31/Agr/ 2022 The Judgments quoted & relied have been rejected without, considering, touching, discussing and even refuting it, how they are not applicable, which is highly perverse, wrong, illegal and bad in law. representative and perused the records. 7. 8. 6. Because in any view, the interest charged is wrong, illegal and excessive. 7. Because in any view, and without prejudice to the above Grounds, Additions madelconfirmed by CiT (A), Interest charged, and the Assessment Order passed is wrong, illegal, without proper opportunity, bad in law and against the facts and law of the case.\" None responded for the assessee. Heard learned departmental The only issue arising out of the aforesaid grounds taken by the assessee is as to whether learned CIT(Appeals) has erred in partly confirming the addition to the extent of Rs.71,44,045/- as unexplained cash credits u/s. 69A of the Act. We have gone through the impugned order which has been passed by Id. CIT(Appeals) in detail. We find that learned CIT(Appeals) has discussed entire evidence submitted by the assessee before it. Relevant paras 4.1.2.1, 4.1.3 and 4.1.5 are reproduced as under: \"4.1.2.1 | have considered the submission of the appellant. The appellant has submitted copies of bank statement of Bank of India at page no. 61 to 65 of paper book, Cash book at page no. 66 to 67 of paper book. On examination of these pages of Paper Book in the course of appellate proceedings, it has been found that the appellant has shown opening cash balance of Rs.6,00,000/- as on 01.04.2011. The appellant has not furnished the basis of opening cash balance. How is this figure of opening cash balance arrived at, no working has been furnished. The appellant has shown opening cash balance without any basis and therefore, the same is not accepted. Thus, the 6|Page ITA No. 31/Agr/2022 cash deposit of Rs.1,32,000/- on 29.10.2011 remains unexplained and consequently, subsequent cash deposits are also unexplained. Even if the opening cash balance of Rs.6,00,000/- is accepted, there is negative cash balance found on 02.12.2011. This fact can be understood as under: As per cash book opening cash balance as on 01.12.2011has been shown at Rs.49,475/-. The appellant has withdrawn cash of Rs.2,50,000/- from bank on this date and also deposited cash of Rs.2,00,000/- & Rs.3,00,000/- on the same date. Thus, the appellant has deposited amount of Rs.5,00,000/-in cash against the available cash of Rs. 2,99, 475/-. Accordingly, on this date negative cash balance of Rs.2,00,525/- can be seen. Above analysis itself proves that the appellant has tried to prepare cash book to explain the cash deposits in the bank account by making entries in the cash book. This is a failed attempt of the appellant. Therefore, cash book presented during the assessment proceedings as well as appellate proceedings cannot be relied upon. Accordingly, the same is rejected. The contentions of the appellant that the cash deposits have been made out of cash withdrawal are liable to be rejected. Withdrawing cash and depositing the same in the bank account cannot be said to be business of any assessee. The cash from the bank account is withdrawn for some specific purposes, not for depositing again in the same bank account. The appellant has not done this in the ordinary course of business as purposes of withdrawals have not been explained. If the cash withdrawn has been utilised in business, then the appelant should have mentioned about the such transactions which it did not do. Therefore, the submission of the appellant in this regard is nothing but a cooked up story which is remained unsubstantiated. In the facts and in the circumstances, the judgments relied upon by the appellant are distinguishable and not applicable to this case.In view of this discussion, cash deposit of Rs.57,00,000/- is treated as unexplained within the meaning of section 69 of the Act. Accordingly, addition made by the Ld. A.O. is hereby confirmed to this extent. Disallowance under the provisions of section 43A(3) of the Act 4.1.3 The appellant has furnished copy of purchase bills (page no. 68 to 73 of paper book) and sale bills (page no. 74 to 82 of paper book). On perusal of purchase bills, it has been found that various purchases of grains were made in cash. The appellant vide this office letter date 24.11.2021 was asked to submit the explanation that why such purchases should not be disallowed as per the provisions of section 40A(3) rw.r. 6DD of the Income-tax Rules, 1962. The appellant Submitted that following purchases have been made in cash from the Cultivators of agricultural products and therefore, these payments are allowable as per the provisions of section 40A(3A) r.w.r. 6DD(e) 7| Page 1 3. Total: 4 6 Total: 7 9. Total: 10 11 12 Total: 13 15 Total: 16 17 Total: 19 20 21 Total: produce was purchased Subhash Singh Sikanwar Ramprakash Sikanvar AManoj Baghel Anirudh Singh Tomar Sivaram Singh Tomar Captan Singh Tomar Ranjit Singh Parashar Sandhu Singh Kushwaha Manoj Sharma Ramavtar Sikarwar Rakesh Jadaon HarishankarParashar Girraj Sharma Singh Rakesh Singh Parmar Kamlesh Agrawal Gabbar AsharamBaghel Jaipal Singh Tomar Rahul Parmar Sadhu Singh Parmar Vijay Singh Arhar Grand Total (atbtc+dtetftg) Arhar Arhar Bajra Bajra Bajra Singh Arhar Bajra Bajra Bajra Arhar Arhar Arhar Arhar Bajra Bajra Bajra Bajra Bajra 16.00 Bajra 18.66 21.00 $5.66 16.20 15.00 14.60 45.80 80.50 91.50 48.45 220,45 8.20 5.80 6.00 20 14.10 S6.70 91.80 3000/- 48000/ 3000/- S5980/ 3000/- 63000/ 3000/ 760/ 760/ 760/ 154,05 760/ 770/ 770/ 2980/ 2980/ 2980/ 2980/ 770/- 37306/ 770/- 169745/ 20.20 2980/ Arhar 22.40 2980/- 66752/ 2980/ 2980/- 24436/ 749/ 88.20 749/ 65.80 749/ 245.20 749/ 54.00 765/. 42.05 765/. 166980/ 58.00 765/ 12312/ 11400/ 765/ 11096/ 34808/ 61985/ 70454/ 17284/ 17880/ 59600/ 168966/ 68756/ 66058/ 49284/ 184098/ 41310/ 32168/. 44370/. 117848/ ITA No. 31/Agr/2022 902045/ 14.12.20I| 14.12.2011 15.12.2011 grower producer is placed on following Page No. in the 18.12.2011 supplement 42018/- 30.12.201l1 13 60196/- 30.12.2011 14 ary Book 14.12.2011 3 1 15.12.2011 4 2 01.03.2012 15.12.20I1 6 16.12.2011 7 16.12.20I1 16.12.2011 9 10 18.12.2011 11 18.12.2011 12 30.12.2011 13 16 01.03.2012 17 01.03.2012 18 03.03.2012 19 03.03.2012 20 03.03.2012 21 paper 8Page ITA No. 31/Agr/2022 9. The appellant also submitted that in addition to above parties, cash payment of Rs.42,000/- was also made to Shri Suresh Chand Gupta proprietor M/s Goel Trading company. The appellant vide its reply dated 21.01.2022 submitted copies of affidavits (however the appellant has mentioned it as original in the submission) of above parties who have confirmed that cash payments were made by the appellant on their demand and they had insisted to make payment in cash. Accordingly, the appellant contented that no disallowance should be called for where payment is made in cash to cultivator or producer of agriculture product. I have gone through the submission made in this regard and various judgements relied upon by the appellant. It has been found that the affidavits furnished by the appellant are not in original and they are not even notarized. The affidavits are not supported any cogent material proving that the above parties are actually cultivators of agricultural products. The appellant has not submitted any evidence in this regard. In the facts and the circumstances, the judgements relied upon by the appellant are not applicable in this case. Accordingly, considering the provisions of section 40A(3) r.w.r. 6DD, the cash payment of Rs.9,44,045/- (Rs. 902045/- + Rs.42,000/-) for making purchases of grains is not an allowable expenditure. Therefore, amount of Rs.9,44,045/- is hereby added to the total income of the appellant. 4.1.5. Considering above discussion, following additions are hereby confirmed in the manner prescribed here under: () Rs.5,00,000/- (deposits of Rs.2,00,000/- on o3.02.2012 + Rs.3,00,000/-on 16.03.2012) being unexplained deposit in the Bank of India as per the provisions of section 69 of the Act. (i) Cash deposit of Rs.57,00,000- being unexplained cash deposit in bank account as per the provision of 69 of the Act. (i) Rs.9,44,045/- being cash purchases and disallowable expenditure u/s 40A(3) r.w.r. 6DD of the Act. Accordingly, addition of Rs.71,44,045/- is hereby confirmed and the appellant gets relief of Rs.19,65,624/-. The grounds of appeal are partly allowed,\" We notice that the learned CIT(Appeals) has examined each entry in the cash book and after detailed examination has found that there was no evidence to show as to how the opening balance of Rs.6,00,000/- as on 9| Page *aks/ 2 3 01.04.2011 existed. Accordingly, learned CIT(Appeals) has rightly found that the cash deposit of Rs.1,32,000/- on 29.10.2011 and subsequent cash deposits remained unexplained. Learned CIT(Appeals)) has also examined from other angle that even if the opening cash balance of Rs.6,00,000- is accepted, there remains negative cash balance on 02.12.2011 as has been explained in para 4.1.2.1 of the impugned order. Learned CIT(Appeals) has rightly rejected the cash book. We are not inclined to interfere in the wisdom of learned CIT(Appeals). The impugned order IS based on detailed factual analysis and reasons thus warrants no interference at this stage. Therefore, the issue is determined against the assessee and in favour of the Revenue. 10. 4 Dated: 29.04.2025 5. In the result, assessee's appeal is dismissed. Copy forwarded to: Order pronounced in the open court on 29.04.2025. (ANNAPURNA GUPTA) ACCOUNTANT MEMBER Appellant Respondent CIT Sd/ CIT(A) ITA No. 31/Agr/2022 DR Sd/. (SUNIL KUMAR SINGH) JUDICIAL MEMBER Asst. Registrar, ITAT, Agra 10| Page "