SUDHIR KUMAR SHARMA,ALLAHABAD V. ITO 2(3), ALLAHABAD

ITA 171/ALLD/2024

AI Insights

The case involves Shri Sudhir Kumar Sharma, an employee of GSJS Public School, who appealed against the addition of Rs.25,59,405 to his income for the assessment year 2011-12, which was attributed to unexplained cash deposits in his bank accounts. The Assessing Officer had initially disbelieved the assessee's explanation that the deposits were from school fees and personal agricultural income, leading to the addition. The CIT(A) partially upheld this addition, applying the peak credit theory. However, the Tribunal, after considering the evidence and the explanations provided, including the testimony of the school manager and affidavits regarding agricultural income, found the assessee's explanations credible and directed the complete deletion of the addition.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 771909 (ITAT-ALLAHABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2011-2012
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: REVENUE DID; A.K. SINGH
• Keywords: Condonation of delay; Set aside; Peak credit

Judgement Text

"I.T.A. No.171/Alld/2024 Assessment Year:2011-12 1 IN THE INCOME TAX APPELLATE TRIBUNAL ALLAHABAD BENCH “SMC”, ALLAHABAD BEFORE SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER AND SHRI SUBHASH MALGURIA, JUDICIAL MEMBER I.T.A. No.171/Alld/2024 Assessment year:2011-12 Shri Sudhir Kumar Sharma 118, Dev Nagar Awas Yojna, Jhunshi, Prayagraj. PAN:BRWPS0407H Vs. Income Tax Officer-2(3), Allahabad (Appellant) (Respondent) O R D E R PER SUBHASH MALGURIA:J.M. This appeal vide I.T.A. No.171/Alld/2024 has been filed by the assessee for assessment year 2011-12 against impugned appellate order dated 27/06/2024 (DIN & Order No.ITBA/NFAC/S/250/2024- 25/1066142467(1) of Commissioner of Income Tax (Appeals) [“CIT(A)” for short]. 2. This appeal has been filed by the assessee, beyond time limit prescribed under section 253(3) of the I.T. Act. The assessee has submitted Appellant by None Respondent by Shri A. K. Singh, Sr. D.R. Printed from counselvise.com I.T.A. No.171/Alld/2024 Assessment Year:2011-12 2 an application dated 25/11/2024 duly supported by affidavit for condonation of delay in filing of the appeal pleading that the delay was unintentional and beyond the control of the assessee and has requested to admit the appeal for hearing. The learned Sr. Departmental Representative for Revenue did not express any objection to assessee’s application for condonation of delay in filing of the appeal. In view of the foregoing, and in specific facts and circumstances of the present appeal before us, the delay in filing of this appeal is condoned; and the appeal is admitted for hearing. 3. The facts of the case, in brief, are that the assessment order dated 29/12/2018 was passed by the Assessing Officer u/s 147/143(3) of the Act whereby the assessee’s total income was determined at Rs.27,18,685/- as against returned income of Rs.1,59,280/-. In the aforesaid assessment order, an addition of Rs.25,59,405/- was made on account of cash deposited by the assessee in bank account. The assessee is an employee of GSJS Public School. During the assessment proceedings the Assessing Officer asked the assessee to furnish explanation regarding cash deposit of aforesaid amount of Rs.25,59,405/- in bank accounts (in State Bank of India and in ICICI Bank). The assessee explained that the amount deposited in aforesaid two bank accounts was out of fees collected from students by the school. The Assessing Officer disbelieved the assessee’s explanation and made the aforesaid addition of Rs.25,59,405/-. 3.1 Aggrieved, the assessee filed appeal in the office of the learned CIT(A). During appellate proceedings in the office of the learned CIT(A), the assessee reiterated the submissions that the cash deposit was towards the fees collected from the students for school education. He further submitted that the Manager of the school was produced before the Assessing Officer, who confirmed that the assessee had used his bank Printed from counselvise.com I.T.A. No.171/Alld/2024 Assessment Year:2011-12 3 account for depositing fees collected from the students. The assessee also submitted that the bank account was used for personal purposes of his own and his family. He submitted that the assessee’s wife had agricultural income, which was also deposited in the bank account. The assessee furnished affidavit of his wife to the effect that her agricultural income and sale proceeds of land in cash were also deposited in the bank. However, the learned CIT(A) applied peak credit theory and confirmed the addition of Rs.15,95,205/- out of the total addition of Rs.25,59,405/-. 4. The present appeal has been filed by the assessee against the aforesaid impugned order of learned CIT(A). At the time of hearing, the assessee was represented by none. In the absence of any representation from the assessee’s side, we heard learned D.R. and perused the materials available on record. The learned D.R. placed reliance on the assessment order and on the impugned order of learned CIT(A). 5. We have heard learned D.R. and perused the materials available on record. It is found that the assessee had produced the Manager of the school in support of the claim that the aforesaid bank accounts were used for depositing cash received from the students of the school. It is further found that the assessee has submitted the affidavit of his wife to the effect that the bank account was used for depositing her agricultural income and sale proceeds of agricultural land in cash. The Assessing Officer and the learned CIT(A) have disbelieved the explanation furnished by the assessee merely on the basis of suspicion, doubt and conjecture. The explanation furnished by the assessee has been disbelieved despite evidence placed on record by the assessee in support of the explanation. In the specific facts and circumstances of the present case, the explanation furnished by the assessee is found to be acceptable. Therefore, we set aside the impugned Printed from counselvise.com I.T.A. No.171/Alld/2024 Assessment Year:2011-12 4 order of learned CIT(A) and direct the Assessing Officer to delete the entire addition of Rs.25,59,405/- including the aforesaid amount of Rs.15,95,205/- which was confirmed by learned CIT(A) in the impugned order. 6. In the result, the appeal of the assessee stands allowed. (Order pronounced in the open court on 25/08/2025) Sd/. Sd/. (ANADEE NATH MISSHRA) (SUBHASH MALGURIA) Accountant Member Judicial Member Dated:25/08/2025 *Singh Copy of the order forwarded to : 1. The Appellant 2. The Respondent. 3. Concerned CIT 4. D.R., I.T.A.T., Allahabad Printed from counselvise.com "