TEKCHAND PUNJABI, RAIGARH,RAIGARH V. ITO, WARD-1, RAIGARH, RAIGARH

ITA 569/RPR/2025

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The case involves Tekchand Punjabi, the appellant, who contested the additions made to his income for the assessment year 2016-17 by the Income Tax Officer (ITO), Ward-1, Raigarh. The additions were based on cash deposits of Rs.4,21,874 in his bank account, which the AO deemed unexplained. The appellant argued that these deposits were from a previously withdrawn amount of Rs.5,00,000 through a bearer cheque issued in the name of his employee, Mr. Prem Shankar. The CIT(A) upheld the AO's decision, leading to the appeal in the Tribunal. The Tribunal criticized the CIT(A)'s reliance on mere suspicion and the lack of a thorough examination of the appellant's explanations and evidence, including an affidavit from Mr. Prem Shankar.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 778675 (ITAT-RAIPUR)
• Duration Of Justice: 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 29-09-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: G.S. AGRAWAL
• Keywords: Set aside

Judgement Text

"आयकर अपीलीय अिधकरण Ɋायपीठ “एक-सद˟” मामला रायपुर मŐ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR ŵी पाथŊ सारथी चौधरी, Ɋाियक सद˟ क े समƗ BEFORE SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER आयकर अपील सं./ITA No.569/RPR/2025 िनधाŊरण वषŊ /Assessment Year: 2016-17 Tekchand Punjabi, C/o Shankar Lal Tekchand, Subhash Chowk, Raigarh, 496001, Chhattisgarh. PAN: AEQPP2267N .......अपीलाथŎ / Appellant बनाम / V/s. ITO, Ward-1, Raigarh, Income Tax Office, Chakradhar Nagar, Raigarh, Chhattisgarh 496001 ……ŮȑथŎ / Respondent Assessee by : Mr. G.S. Agrawal, CA. Revenue by : Dr. Priyanka Patel, Sr.DR सुनवाई की तारीख / Date of Hearing : 14.10.2025 घोषणा की तारीख / Date of Pronouncement : 15.10.2025 Printed from counselvise.com 2 Tekchand Punjabi, Raigarh Vs. ITO, Ward-1, Raigarh ITA No. 569/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 07.07.2025 for the assessment year 2016-17 as per the following grounds of appeal. “1. That under the facts and the law, the Ld. CIT(A) erred in confirming the addition of Rs.4,00,000/- made by the Ld. AO rejecting the explanations and supporting filed that cash deposited earlier into Bank on 12.06.2015 was withdrawn from Bank after 12 days on 22.06.2015 through employee of firm i.e. Shri Prem Shankar Mishra whose affidavit was also filed as the cash withdrawn was not needed. Prayed that appellant discharged the burden cast u/s 69A of proving the case deposit into Bank of Rs.4,00,000/- the addition is arbitrary and kindly be deleted. 2. That under the facts and the law, the Ld. CIT(A) further erred in confirming the addition of Rs.21,874/- made by the Ld. AO which is cash deposit in Bank from known sources. Prayed that the addition of Rs.21,874/- kindly be deleted” 2. The relevant facts emanating from the assessment order are that as per the bank statements of the assessee maintained with State Bank of India, Raigarh, it was observed by the AO that cash of Rs.1,15,000/- was deposited on 22.06.2015 and on 25.06.2015 again cash of Rs.4,00,000/- Printed from counselvise.com 3 Tekchand Punjabi, Raigarh Vs. ITO, Ward-1, Raigarh ITA No. 569/RPR/2025 was deposited in this account. That on being enquired, the assessee had answered that the source of such cash deposit was the amount of Rs.5,00,000/- being withdrawn issuing cheque No.5654712, which is a bearer cheque issued in the name of Mr. Prem Shankar, who is the employee of assessee firm. Regarding this submission, Ld. AO from the bank account statements simply observed that since such practice of issuing bearer cheque in the name of Mr. Prem Shankar never done by the assessee previously, therefore, it is not correct and colourable device that was adopted by the assessee trying to explain the cash deposit. In this regard, Ld. CIT(A)/NFAC while upholding the findings of the AO held as follows: “ 7.2 Ground No 2: That the learned AD erred in making addition of Rs. 4 Lacs cash deposited in bank on 25.06.2015. The appellant explained that on 12.06.2015. Rs 5,00,000/- was withdrawn from the same bank account which has been deposited The learned AD arbitrarily rejected the same and added which is without any basis and be deleted. The explanation that the cash which was withdrawn has been redeposited, does not hold any merit. As per the appellant, it is a common practice in businesses that businessmen do not go to the bank for depositing or withdrawing the cash, it is the employee(s) who carry this work. The Assessing Officer in the remand report has pointed out that this contention of the appellant is completely un- acceptable. On examining the bank account statement, it can be seen that except for this instance, at no date anywhere it had been seen that the service of Shri Prem Shankar Mishra had been used for Printed from counselvise.com 4 Tekchand Punjabi, Raigarh Vs. ITO, Ward-1, Raigarh ITA No. 569/RPR/2025 withdrawing the cash from the bank in this manner. Therefore, the above submission of the appellant cannot be accepted. During the appellate proceedings, the appellant produced copy of Affidavit of Shri Prem Shankar Mishra. By producing affidavit of Shri Prem Shankar Mishra, the appellant is trying to validate the transaction of Rs.5,00,000/- deposited in cash into self bank account. The affidavit by itself is not acceptable and it has to be corroborated with evidence. An employee will do as his master says, so there is nothing to be gained by the appellant on this score. The appellant was not prevented by sufficient cause, to produce this affidavit before the assessing officer at the time of assessment proceedings. The assessment was finalized on 22/12/2018 at which time the appellant could have produced the affidavit and the employee, Shri Prem Shankar Mishra before the Assessing officer. Now after a lapse of almost 7 years, an affidavit is produced which is hardly enough to prove the transaction, the appellant cannot push the onus on to the assessing officer stating the AD should have examined Shri Prem Shankar Mishra in the remand proceedings. This ground of the appellant is dismissed. 7.3 Ground No 3: That the learned AQ further erred in making addition of Rs 21,074/-out of Rs.1,15,000/- for cash deposited in bank account on 22/06/2015 after deducting opening cash in hand of Rs. 93,126/ The appellant filed written submission a long with cash flow and bank statement to explain the source of cash deposited by him in his bank account but the learned AO rejected the explanation arbitrarily. Prayed to delete the addition of Rs.21,874/- The submission of the appellant has been examined. The assessing officer in the Assessment order made a case, where the source of cash deposits of Rs. 1.15,000/- on 22-06-2015 was the withdrawn Printed from counselvise.com 5 Tekchand Punjabi, Raigarh Vs. ITO, Ward-1, Raigarh ITA No. 569/RPR/2025 money of Rs. 5,00,000/- is not acceptable, as that source was already rejected. Therefore, only Rs. 93,126/- was available with the appellant, as the same is carried forward cash in hand, being available with him on 22-06-2018. Therefore, the balance amount of Rs. 21,674/-was added back to his return of income, as the unexplained money, being sourced from undisclosed sources. The findings and addition made by the Assessing officer is upheld.” 3. I have carefully perused the documents on record, heard the submissions of the parties herein, analyzing the facts and circumstances of the case. 4. In this case, there was a disallowance by the AO regarding cash deposits of Rs.4,21,874/- u/s 69A of the Act as unexplained money in the hands of the assessee, this was affirmed by the Ld. CIT(A)/NFAC. The assessee had explained to the department prior to the deposit of this amount, the assessee had withdrawn through bearer cheque No.5654712 issued in the name of Mr. Prem Shankar amounting of Rs.5,00,000/- and since it is not required fully for the purpose of business again some amount has been deposited back in his bank account. Firstly, the department doubts the issuance of bearer cheque by the assessee stating that no such transaction had ever taking place in the bank account of the assessee and just because prior to this date there was no issuance of bearer cheque by the assessee, thus, this particular transaction of Printed from counselvise.com 6 Tekchand Punjabi, Raigarh Vs. ITO, Ward-1, Raigarh ITA No. 569/RPR/2025 withdrawal of Rs.5,00,000/- through bearer cheque issued in the name of Mr. Prem Shankar is a colourable device and therefore, the amount is added in the hands of the assessee. Before the Ld. CIT(A)/NFAC the assessee had also filed an affidavit from Mr. Prem Shankar regarding service that was taken from him as employee of the partnership firm. However, that also was rejected by the Ld. CIT(A)/NFAC stating that since Mr. Prem Shankar was mere employee of the assessee, therefore, he would just obey whatever the master says without adjudicating anything on the source of the deposits. On the submissions of the assessee, on the genuinity of the bearer cheque transaction, nothing has been brought on record by the CIT(A)/NFAC. The mandate of section 250 clause (4) & (6) has been abruptly violated by the first appellate authority. That, further neither the AO nor the Ld. CIT(A)/NFAC had brought on record negating facts that the such amount of Rs.5,00,000/- was not withdrawn by the assessee. The revenue has also not brought on record any evidence to show any unaccounted source of money by the assessee so to say that the assessee had deposited such money from un-disclosed source. 5. Admittedly, the department acknowledges that such money deposited is from the declared source of income of the assessee. The revenue should have conducted necessary enquiry to understand the genuinity of the transaction which it had failed to do. Printed from counselvise.com 7 Tekchand Punjabi, Raigarh Vs. ITO, Ward-1, Raigarh ITA No. 569/RPR/2025 6. Rather, the AO on the basis of mere suspicion added the amount as unexplained money in the hands of the assessee and as affirmed by the CIT(A)/NFAC only on two grounds, i.e. (i) the assessee had not conducted any such bearer cheque transaction earlier to this date (ii) since the affidavit by Mr. Prem Shankar was filed for the first time before the CIT(A)/NFAC, thus, was rejected without going into the merits of the case of the assessee, the adjudication, therefore, by the Ld. CIT(A)/NFAC becomes arbitrary bad in law, liable to be quashed. Therefore, addition u/s 69A in the hands of the assessee is misplaced in the present set of facts and circumstances. Accordingly, the order of Ld. CIT(A)/NFAC is set aside and the appeal of the assessee is allowed. 7. In result, the appeal of the assessee is allowed. Order pronounced in open court on 15th day of October, 2025. Sd/- (PARTHA SARATHI CHAUDHURY) Ɋाियक सद˟/JUDICIAL MEMBER रायपुर / Raipur; िदनांक / Dated : 15th October, 2025. HKS, PS Printed from counselvise.com 8 Tekchand Punjabi, Raigarh Vs. ITO, Ward-1, Raigarh ITA No. 569/RPR/2025 आदेश की Ůितिलिप अŤेिषत / Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant. 2. ŮȑथŎ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G.) 4. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, “एक-सद˟” बŐच, रायपुर / DR, ITAT, “SMC” Bench, Raipur. 5. गाडŊ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, //True copy// Private Secretary आयकर अपीलीय अिधकरण, रायपुर / ITAT, Raipur Printed from counselvise.com "