SHER SINGH,SANGRUR V. INCOME TAX OFFICER, SANGRUR

ITA 749/CHANDI/2025

AI Insights

The case involves Sher Singh, an agriculturist, who appealed against the order of the Commissioner of Income Tax (Appeals), which partly confirmed the addition of \\u20b914,75,600 made by the Assessing Officer as unexplained cash deposits under section 69A of the Income Tax Act. The Tribunal considered additional evidence provided by the assessee, including affidavits and bank statements, which explained the source of the deposits as agricultural income and milk sales. However, due to the lack of complete corroborative evidence, the Tribunal sustained a smaller addition of \\u20b92,50,000.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 773000 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2017-2018
• Appeal Filed On: 24-05-2025
• Other Referred Cases: Tek Ram (Dead) Through LRs v. CIT 357 ITR 133 (SC), CIT v. Mukta Metal Works 336 ITR 555 (P&H)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR
• Assessee Lawyers: GAURAV SONI
• Keywords: Condonation of delay; Additional evidence; Corroborative evidences; Principle of natural justice
• Section: 144; 234B

Judgement Text

"आयकर अपीलीय अिधकरण,चǷीगढ़ Ɋायपीठ “A” , चǷीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH HEARING THROUGH: HYBRID MODE ŵी लिलत क ुमार, Ɋाियक सद˟ एवं ŵी मनोज क ुमार अŤवाल, लेखा सद˟ BEFORE: SHRI. LALIET KUMAR, JM & SHRI. MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No. 749/Chd/ 2025 िनधाŊरण वषŊ / Assessment Year : 2017-18 Sher Singh, Near Shiv Mandir Village Balian, Sangrur बनाम The ITO, Sangrur ˕ायी लेखा सं./PAN NO: FLRPS1670B अपीलाथŎ/Appellant ŮȑथŎ/Respondent िनधाŊįरती की ओर से/Assessee by : Sh. Gaurav Soni, Advocate राजˢ की ओर से/ Revenue by : Dr. Ranjit Kaur, Addl. CIT, Sr. DR सुनवाई की तारीख/Date of Hearing : 22/09/2025 उदघोषणा की तारीख/Date of Pronouncement : 22/ 09/2025 आदेश/Order PER LALIET KUMAR, J.M: This appeal by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi dated 24.01.2025 for assessment year 2017-18, whereby the Ld. CIT(A) partly confirmed the addition of ₹14,75,600/- made by the Assessing Officer on account of cash deposits, sustaining addition of ₹12,25,600/- u/s 69A of the Act and granting relief of ₹2,50,000/-. Printed from counselvise.com 2 2. The grounds of appeal raised by the assessee are as under: - 1. That the appellate order passed by the learned CIT(A), NFAC is illegal, against law and facts of the case as well and against the principles of natural justice, therefore, appellate order passed by the learned CIT(A) NFAC is illegal, unwarranted and uncalled for. 2. That the ld. CIT(A), NFAC, has erred both in law and on facts in partly sustaining the addition of 12,25,600/- out of total cash deposit of 14,75,600/-as unexplained money under section 69a of the act. 3. That the Ld. CIT(A) failed to appreciate that the cash deposited in the bank account was duly explained from disclosed sources, namely: Agricultural income from own and wife's agricultural holdings; Income from milk sales; Opening cash balance and household savings; and therefore, the entire addition ought to have been deleted. 4. That the Ld. CIT(A) has grossly erred in not admitting all evidences as sufficient and reliable despite the remand proceedings and has proceeded to make arbitrary estimations by allowing relief of only 22,50,000/- without proper basis. 5. That the Ld. CIT(A) has failed to consider the affidavit and supporting evidence of agricultural landholding and milk business, which were material to adjudication and were duly supported by judicial precedents permitting admission under Rule 46A. Printed from counselvise.com 3 6. That the appellant craves the right to add, alter, or amend any ground of appeal before or during the course of hearing 7. That the learned CIT(A), NFAC Delhi has erred in sustained the addition made by the learned income tax officer, Sangrur by applying the special rate of tax u/s 115BBE of the Act, whereas provisions of section 115BBE of the Act are not applicable in the case of the appellant and special rate of tax u/s 11BBR of the Act 7 has been applied without giving any proper opportunity to the appellant. therefore, appellate order passed by the learned CIT(A) NFAC and assessment order passed by the learned income tax officer Sangrur is illegal, uncalled for unwarranted and needs to be deleted 8. That the learned CIT(A), NFAC Delhi has erred in sustained the interest charged by the learned income tax officer, Sangrur u/s 234A of the act amounting to Rs. 2,46,142/- and u/s 234B 3,02,944/- without considering the submissions and supporting evidences. therefore, interest charged by the learned income tax officer Sangrur and sustained by the Ld. CIT(A), NFAC is illegal, uncalled for unwarranted and needs to be deleted 9. That the appellant craves to leave or to amend the ground of appeals before or at the time of hearing. 2. The Registry has pointed out that there was a delay of 245 days in filing of the appeal. During the proceedings before us, the ld. Counsel for the Assessee has submitted an application for condonation of delay along with an Affidavit, which is reproduced as under:- Printed from counselvise.com 4 3. We have considered the reasoning given by the Assessee in the affidavit and inclined to condone the delay. Printed from counselvise.com 5 4. The ld. DR did not have any objection for this condonation of delay. 5. The brief facts are that the assessee, an individual engaged in agricultural activities and sale of milk, deposited a sum of ₹14,75,600/- in various bank accounts during the financial year 2016–17, including the demonetisation period. The Assessing Officer, noting non-compliance with statutory notices, framed the assessment ex-parte u/s 144 on 25.11.2019, treating the entire deposit as unexplained u/s 69A. 6. In appeal, the assessee filed additional evidence comprising affidavits, cash-flow statement, Jamabandi, and bank statements, claiming that deposits were sourced from agricultural income, milk sales, and funds of his wife, Smt. Rupinder Kaur. The Ld. CIT(A), after obtaining the remand report, admitted the evidence but held that they were not fully reliable. An estimate, relief of ₹2,50,000/- was allowed, and the balance ₹12,25,600/- was confirmed. Aggrieved, the assessee is in further appeal. 7. Now the assessee is in appeal before us on the ground mentioned in the appeal. 7.1 The Ld. AR reiterated that the assessee is an agriculturist possessing substantial agricultural land, jointly with his wife, and also derives income from milk and allied products. A return of income was filed declaring Printed from counselvise.com 6 agricultural income of ₹7,00,000/- and milk income of ₹2,47,700/-, which clearly explains the availability of cash. It was contended that the wife of the assessee had withdrawn funds in July 2016, which were duly redeposited during the demonetization period. Her affidavit and bank statement were placed on record but were ignored by the authorities below. It was argued that the cash-flow statement prepared by the assessee merely reflects actual movements of cash and cannot be discarded as self-serving when corroborated by surrounding material. 7.2 The Ld. AR further submitted that both the AO and the CIT(A) have mechanically brushed aside the evidence. In fact, once the Ld. CIT(A) admitted additional evidence under Rule 46A, the same had to be given full weightage. Reliance was placed on decisions including Tek Ram (Dead) Through LRs v. CIT 357 ITR 133 (SC) and CIT v. Mukta Metal Works 336 ITR 555 (P&H), wherein it was held that additional evidence necessary for just adjudication must be admitted and appreciated. 7.3 Accordingly, the AR prayed that the entire addition sustained of ₹12,25,600/- deserves to be deleted as the deposits stand explained from disclosed and exempt sources. 8. On the other hand, the Ld. Sr. Departmental Representative supported the orders of the lower authorities. It was submitted that despite several Printed from counselvise.com 7 statutory notices, the assessee failed to participate in assessment proceedings, thereby inviting ex-parte order u/s 144. 8.1 The DR emphasised that no contemporaneous evidence was produced to substantiate agricultural income, livestock details, or milk sales. The Jamabandi filed does not prove actual ownership of 70 bighas of land in the name of the assessee, and no evidence was filed in respect of agricultural land in the name of his wife. The affidavit of the wife and self-prepared cash-flow statement, without corroboration, cannot be accepted. 8.2 It was contended that the AO in his remand report categorically rejected the claim as an afterthought. The Ld. CIT(A) has already taken a liberal view in granting relief of ₹2,50,000/- for past savings. The balance addition of ₹12,25,600/- was rightly confirmed the in absence of credible evidence. It was, therefore, pleaded that the impugned order requires no interference. 9. We have considered rival submissions and perused the record. The core issue for adjudication is whether the cash deposits of ₹14,75,600/- made during FY 2016–17 stand explained from disclosed sources. 9.1 It is not in dispute that the assessee is an agriculturist and derives income from agricultural operations and milk business. Being a lay farmer not well-versed with tax law, he failed to appear before the AO and thus suffered Printed from counselvise.com 8 an ex parte assessment u/s 144. In appellate proceedings, however, he filed affidavits, Jamabandi, bank statements, and a cash-flow statement. These evidences were relevant, and the Ld. CIT(A) also admitted them. 9.2 We find that the assessee had declared agricultural income of ₹7,00,000/- and milk income of ₹2,47,700/- in the computation forming part of return of income. The cash-flow statement filed is broadly consistent with these disclosures. Importantly, the Revenue has not brought on record any contrary material to negate the agricultural or milk income. Further, the affidavit of the assessee’s wife, evidencing the availability of cash, was also filed. These factors support the assessee’s explanation of the deposits. 9.3 At the same time, the fact remains that the assessee was a non-filer at the time of assessment, did not produce records before the AO, and has not convincingly demonstrated that the withdrawals made from his wife’s account were not utilised elsewhere. In the absence of corroborative details such as crop sale bills, livestock records, or the trend of agricultural earnings in earlier years, a complete acceptance of the claim is not possible. 9.4. Balancing both aspects, we are of the considered view that a substantial explanation of the deposits stands established. In the facts and circumstances, it would be fair to sustain the addition of only ₹2,50,000/- as unexplained, while deleting the balance of ₹10,00,000/-. Printed from counselvise.com 9 10. The appeal of the assessee is partly allowed, with the addition restricted to ₹2,50,000/- as against ₹12,25,600/- sustained by the CIT(A). Order Pronounced in the open Court on 22/09/2025. Sd/- Sd/- मनोज क ुमार अŤवाल लिलत क ुमार (MANOJ KUMAR AGGARWAL) (LALIET KUMAR) लेखा सद˟/ ACCOUNTANT MEMBER Ɋाियक सद˟ /JUDICIAL MEMBER rkk आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to : 1. अपीलाथŎ/ The Appellant 2. ŮȑथŎ/ The Respondent 3. आयकर आयुƅ/ CIT 4. िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, चǷीगढ़/ DR, ITAT, CHANDIGARH 5. गाडŊ फाईल/ Guard File सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "