SIKHA AGRAWAL, RAIGARH,RAIGARH V. INCOME TAX OFFICER, WARD-1, RAIGARH, RAIGARH

ITA 235/RPR/2025

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The case involves Shikha Agrawal, the appellant, contesting several additions made to her income by the Income Tax Officer, Ward-1, Raigarh, for the assessment year 2019-20. The additions pertained to unexplained investments and unexplained money under sections 69 and 69A of the Income Tax Act, 1961, and a valuation difference under section 56(2)(x)(b). The Tribunal examined the evidence presented, including bank statements and RTGS transactions, and found that the Assessing Officer had not adequately investigated the sources of the funds used for the purchases and deposits in question. The Tribunal referenced several judicial precedents to support its decision to allow the appeal in part.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 713155 (ITAT-RAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2019-2020
• Other Referred Cases: Sanjeev Kumar, C/o M/s. Raj Kumar & Associates vs. ITO Ward 2(3)(2), Bulandshahr, Smt. Sarika Jain Vs. The Commissioner of Income Tax, Bareilly and Another
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: SUNIL KUMAR AGRAWAL; WAY OF SELF SPEAKING DOCUMENTARY
• Keywords: Additional evidence; Question of law; Unexplained investment; Cost of acquisition; Gift; Source of fund; Value adopted by valuation officer
• Section: 68; 69

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी पाथ[ सारथी चौधरȣ, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER आयकर अपील सं./ITA No.235/RPR/2025 Ǔनधा[रण वष[ /Assessment Year : 2019-20 Shikha Agrawal A-9, Ashirbadpuram Colony, Near Dhimrapur Chowk, Raigarh (C.G.)-496 554 PAN: CJWPA0265J .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer, Ward-1, Raigarh (C.G) ……Ĥ×यथȸ / Respondent Assessee by : Shri Sunil Kumar Agrawal, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 17.07.2025 घोषणा कȧ तारȣख / Date of Pronouncement : 28.07.2025 Printed from counselvise.com 2 Shikha Agrawal Vs. ITO, Ward-1, Raigarh ITA No.235/RPR/2025 आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM The captioned appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC, Delhi dated 06.02.2025 for the assessment year 2019-20 as per the following grounds of appeal: “Gr.No.1 \"On the facts and circumstances of the case and in law, CIT(A) has erred in sustaining addition of Rs.2,05,800 on income u/s56(2)(x)(b); which is difference of actual purchase cost of land at Rs.12,78,000 & the valuation made by DVO at Rs.14,83,800 of the impugned land; addition of Rs.2,05,800 is unjustified & is liable to be deleted.\" Gr.No.2 \"On the facts and circumstances of the case and in law, CIT(A) has erred in sustaining addition of Rs.1,98,000 on unexplained investment u/s.69, i.e., cash paid for purchase of land; addition is unjustified & is liable to be deleted.\" Gr.No.3 \"On the facts and circumstances of the case and in law, CIT(A) has erred in sustaining addition of Rs.13,15,000 on unexplained money u/s.69A, out of which, Rs.10,75,000 received from husband (Suman Agrawal) and Rs.2,40,000 being cash deposits into saving bank account; addition of Rs.13,15,000 is unjustified and is liable to be deleted.\" Gr.No.4 \"On the facts and circumstances of the case and in law, CIT(A) has erred in sustaining the application of sec115BBE on the impugned additions made by the AO, which is liable to be deleted.\" Gr.No.5 Printed from counselvise.com 3 Shikha Agrawal Vs. ITO, Ward-1, Raigarh ITA No.235/RPR/2025 \"The appellant craves leave, to add, urge, alter, modify or withdraw any grounds before or at the time of hearing.\" 2. The Ld. Counsel for the assessee has not pressed ground of appeal No.1. Accordingly, the Ground of appeal No.1 is dismissed as not pressed. 3. Ground of appeal No.4 is consequential and Ground of appeal No.5 is general. 4. Ground of appeal No.2 pertains to the addition of Rs.1,98,000/- on unexplained investment u/s.69 of the Income Tax Act, 1961 (for short ‘the Act’) i.e. cash paid for purchase of land. The relevant discussion in the assessment order is extracted as follows: “Further, no documentary evidence regarding availability of cash of Rs.2,40,000/- which has been deposited into the bank account and also no documentary evidence of cash payment of Rs.1,98 000/- has been filed by the assessee. Therefore, the source of credit entries in the bank account maintained with the SBI, PBB Raigarh of Rs.2,20,000/- on 11-02-2019, Rs.8,55,000/- on 13-02-2019, cash deposit of Rs.2,40,000/- on 16-02-2019 and cash payment of Rs.1,98,000/- for the purchase of property; aggregating to Rs.15,13,000/- (220000 + 855000 + 240000 + 198000) has not been explained. Therefore, the amount of Rs.13,15,000/- (220000 + 855000 + 240000) is treated as assessee's unexplained money under section 69A of the Income-tax Act, 1961 and treated as assessee's income for the financial year 2018-19 and added to the returned income of the assessee. Penalty proceedings under section 271AAC(1) of the Income- tax Act, 1961 are initiated separately. The amount of Rs.1,98,000/- paid in cash for purchase of property is treated as assessee's unexplained investment under section 69 of the Income-tax Act, 1961 and treated as Printed from counselvise.com 4 Shikha Agrawal Vs. ITO, Ward-1, Raigarh ITA No.235/RPR/2025 assessee's income for the financial year 2018-19 and added to the returned income of the assessee. This amount is taxed under section 115BBE of the Income-tax Act, 1961 natty proceedings under section 271AAC(1) of the Income-tax Act, 1961 are initiated separately.” 5. That it is also on record as placed in the paper book wherein it has been explained before the A.O regarding source of fund including cash payment of Rs.1,98,000/- and the same has been received by the assessee from her husband through RTGS totaling to Rs.12,78,000/-. It is the same amount that has been paid by the assessee. It is not the case of the department that apart from total sale consideration paid, there is also some on money which was paid and not disclosed by the assessee. It is also not the case of the department that the credibility of husband of the assessee is in doubt. Everything is on record and explained by the assesse before the A.O. However, before making the said addition the A.O has not applied his mind and has summarily made the addition without making any enquiry as regards RTGS entry from husband to the assessee. This action of the A.O is perverse, arbitrary and sans independent application of mind. The Co-ordinate Bench of Delhi in the case of Sanjeev Kumar, C/o M/s. Raj Kumar & Associates vs. ITO Ward 2(3)(2), Bulandshahr, reported in 2023(10) TMI 1027-ITAT Delhi on the same issue of “non- application of mind” had observed and held as follows: “14. In view of foregoing discussion, I reach to a logical conclusion that the complete cash book statement clearly explains the source of cash deposit to the bank account of Printed from counselvise.com 5 Shikha Agrawal Vs. ITO, Ward-1, Raigarh ITA No.235/RPR/2025 assessee, wherein the assessee has not only included cash receipts as salary and capital withdrawal from two partnership firms M/s Umang Beverages and M/s Mohan Oil & Cattle Feed and a cash salary from Bihar Milk Foods Pvt. Ltd. and has also reduced the amount of drawings for household expenses. The copy of return of income of wife of assessee Smt. Shalini and father of assessee Shri Kalu Mal co-jointly established that the other family members of assessee are also earning and contributing towards household expenses. Therefore, in my humble understanding the source of cash deposit during demonetization to the bank account of assesses is properly explained by the assessee by way of self speaking documentary evidence and explanation. Secondly, the AO has made addition u/s 69 of the Act which pertains to unexplained investments, whereas the assessee has not made any investment either in movable or any immovable property during the relevant period by way of using cash amount. The Ld.CIT(A) though has given credit of 25% of Impugned cash deposit confirming the remaining part of addition but there is no logic of this segregation. From the relevant operative part of first appellate order, I also note that the Ld.CIT(A) has upheld the part addition without mentioning any charging section and impliedly adopting section 69 of the Act in the line of assessment order. Therefore, respectfully following the proposition rendered by the Hon'ble Jurisdictional High Court of Allahabad in the case of Sarika Jain (supra). I have no hesitation to hold that the addition made by the AO by mentioning incorrect and irrelevant charging section is not sustainable and valid being bad in law. Accordingly, grounds of assessee are allowed and AO is directed to delete the entire addition. 15. In the result, appeal of the assessee is allowed.” 6. Similarly, in the decision of Hon’ble High Court of Allahabad in the case of Smt. Sarika Jain Vs. The Commissioner of Income Tax, Bareilly and Another, reported in (2018) 407 ITR 254 (All) which decision was referred to and applied in the earlier decision of the Co- Printed from counselvise.com 6 Shikha Agrawal Vs. ITO, Ward-1, Raigarh ITA No.235/RPR/2025 ordinate Bench of Delhi (supra), the Hon’ble High Court of Allahabad held as follows: “In the present case, it is apparent that the subject matter of the dispute all through before the Tribunal in appeal was only with regard to the addition of alleged amount of the gift received by the appellant-assessee as his personal income under Section 68 of the Act and not whether such an addition can be made under Section 69-A of the Act. In view of the above, it can safely be said that the Tribunal travelled beyond the scope of the appeal in making the addition of the said income under Section 69-A of the Act. It may be worth noting that the Tribunal has recorded a categorical finding that \"it is clear that under the provisions of Section 68, the addition made by the Assessing Officer and sustained by the CIT (Appeals) cannot be sustained, meaning thereby that the Tribunal was of the opinion that the Assessing Officer and the CIT (Appeals) committed an error in adding the aforesaid amount in the income of the appellant-assessee under Section 68 of the Act. In view of the above, when the said income cannot be added under Section 68 of the Act and the Tribunal was not competent to make the said addition under Section 69-A of the Act, the entire order of the Tribunal stand vitiated in law Accordingly, we answer the question of law, as framed above, in favour of the appellant-assessee and against the Revenue and hold that the Tribunal was not competent to make any addition under Section 69-A of the Act and as the same was subject matter of the appeal before it.” 7. Considering the entire facts and circumstances, I am of the view that when the source of such investment was explained by the assessee and there has not been any enquiry conducted by the department, tax liability could not be arbitrarily imposed on the tax payer assessee when all legal compliances have been met out. Printed from counselvise.com 7 Shikha Agrawal Vs. ITO, Ward-1, Raigarh ITA No.235/RPR/2025 8. The Ld. Sr. DR did not contend that those documents placed on record were additional evidence. When all documentary evidences had been filed by the assessee before the A.O, such addition made based on summary observation without any legal validity cannot be sustained. Hence, the A.O is directed to delete the said addition of Rs.1,98,000/- from the hands of the assessee. Thus, the Ground of appeal No.2 raised by the assessee is allowed. 9. Ground of appeal No.3 pertains to the addition of Rs.13,15,000/- as unexplained money u/s. 69A of the Act. In this regard, the assessee has submitted that an amount of Rs.10,75,000/- has been received from her husband i.e. Shri Suman Agrawal as reflected in the bank account of Shri Suman Agrawal and bank account of the assessee. Confirmation of account of Shri Suman Agrawal as on 31.03.2019 reflecting the loan transaction has been submitted to the department. That further, the bank statement of Shri Suman Agrawal, SBI A/c. No.201199178583 and PNB A/c. No.41200010023505, ITR and computation of Shri Suman Agrawal for A.Y.2019-20 has already been submitted before the department. The assessee further submits that all these documents/evidences have been provided to the department which has not been disproved as false or fabricated. At the same time, an amount Rs.2,40,000/- has been deposited in the bank account No.20270078740 out of the past savings of Printed from counselvise.com 8 Shikha Agrawal Vs. ITO, Ward-1, Raigarh ITA No.235/RPR/2025 the assessee. Since the assessee was having sufficient cash balance of Rs.2,40,000/- as on 16.02.2019 for depositing such cash in the bank account. That since nothing has been brought out by the department as false or fabricated against the assessee, in such scenario, additions in the hands of the assessee cannot sustain. The revenue has based its finding on suspicion and conjecture and on improper rejection of tenable material. The assessee on the other hand has successfully demonstrated the nature and source of the cash deposits complying the provisions of Section 69A of the Act. No defect has been pointed out regarding the documents placed on record by the revenue. It is trite that suspicion how so ever strong cannot take place of proof as held in the case of Umacharan Shaw & Bros. Vs Commissioner Of Income-Tax [1959] 37 ITR 271 (SC). The Hon’ble Supreme Court in the case of Dhakeshwari Cotton Mills Ltd. Vs. CIT [1954] 26 ITR 775 (SC) has held that the powers given to the revenue authorities, however wide, do not entitle them to make assessment on pure guess work without reference to any evidence or material. An assessment cannot be made only on bare suspicion. 10. The Ld. Sr. DR also could not refute these facts on record nor could place on record any evidence which suggests that the assessee has not explained the nature and source of the cash deposits. Considering the aforesaid factual position and the judicial pronouncements, the addition Printed from counselvise.com 9 Shikha Agrawal Vs. ITO, Ward-1, Raigarh ITA No.235/RPR/2025 made by the A.O u/s. 69A of the Act is misplaced in the case of the assessee. Accordingly, the A.O is directed to delete the same from the hands of the assessee. Thus, the Ground of appeal No.3 raised by the assessee is allowed. 11. In the result, appeal of the assessee is partly allowed. Order pronounced in open court on 28th day of July, 2025. Sd/- (PARTHA SARATHI CHAUDHURY) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर / Raipur; Ǒदनांक / Dated : 28th July, 2025. SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The Pr. CIT-1, Raipur (C.G.) 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, “एक-सदèय” बɅच, रायपुर / DR, ITAT, “SMC” Bench, Raipur. 5. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur Printed from counselvise.com "