YASH SHERAWAT,NARNAUL V. ITO,WARD-2, HARYANA

ITA 893/DEL/2024

AI Insights

The case involves an appeal by Yash Sherawat against the order of the Commissioner of Income-tax (Appeals) - NFAC, Delhi, concerning the assessment year 2017-18. The primary contention revolves around the cash deposits made by the assessee during the demonetization period, which were claimed to be from cash withdrawals made prior to the announcement of demonetization. The assessee argued that these deposits were not unexplained income but rather a redeposit of cash previously withdrawn for agricultural transactions. The Income Tax Officer (ITO) had initially made an ex-parte assessment under section 144 of the Income Tax Act, 1961, which the assessee contested, leading to this appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312262 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM KRISHAN MEENA
• Assessee Lawyers: RAJESH GOEL
• Keywords: Opportunity of being heard
• Section: 144

Judgement Text

"I.T.A.No.893/Del/2024 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC” NEW DELHI BEFORE SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER आ.अ.सं/.I.T.A No.893/Del/2024 िनधा रणवष /Assessment Year: 2017-18 Yash Sherawat, 1439, College Road Nangal Choudhary Mahendergarh, Haryana. बनाम Vs. ITO, Ward 2, Mahendergarh Road, Mahavir Chowk, Narnaul, Haryana. PAN No.FRVPS3550Q अपीलाथ\u0012 Appellant \u0014\u0015यथ\u0012/Respondent िनधा\u0007\bरतीक ओरसे /Assessee by Shri Rajesh Goel, Adv. राज\u0012वक ओरसे /Revenue by Shri Ram Krishan Meena, Sr. DR सुनवाईक तारीख/ Date of hearing: 25.04.2025 उ\u0018ोषणाक तारीख/Pronouncement on 28.04.2025 आदेश /O R D E R This appeal is filed by the Assessee against the order of the Ld. CIT(Appeals)-NFAC, Delhi dated 27/12/2023 for the AY 2017-18. Assessee raised the following grounds: - “On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in facts of the case without appreciating: • THAT the cash deposited during the demonetization period was from available Cash in hand which was earlier withdrawn from the same Bank Account right before the demonetization was announced. I.T.A.No.893/Del/2024 2 • THAT the cash was deposited because of the demonetization. • THAT a complete cash flow statement is also furnished to the Ld. CIT(A) to prove the availability of cash in hand with the assessee. • THAT the assessee was never directed by either the Ld. AO or the Ld. CIT(A) to submit proof of being an agriculturist. • THAT the assessee has never claimed to use his Agricultural Income for making all the cash deposit in his bank account.” 2. Ld. Counsel for the assessee, at the outset, submits that Ld. CIT(Appeals) did not consider the submissions and the evidences furnished in the form of cash flow etc. before disposing of the appeal. Ld. Counsel submits that it was explained in a cash flow that the deposits were made out of cash withdrawals from the bank account on earlier occasions. Ld. Counsel, therefore, submitted that the appeal may be restored to the file of the ld. CIT(A) for deciding afresh considering the cash flow and the relevant evidences which were already placed before him. 3. Ld. DR has no serious objection. 4. Heard rival submissions, perused the orders of the authorities below. It is noticed from the statement of facts before the Ld. I.T.A.No.893/Del/2024 3 Commissioner of Income Tax (Appeals) that the assessee had stated as follows: - “STATEMENT OF FACTS: The Assessee is an agriculturist only and is not engaged in any kind of Business activity during the FY 2016-17 relevant for AY 2017-18. The assessee was not liable to file his ITR since he earned income from agricultural activity only. During the relevant year, the assessee deposited Cash of Rs.12,50,000/- in his Bank Account which was previously withdrawn from the same Bank Account of the assessee and from available Cash in hand. This Cash was deposited on 2 separate dates as follows: 11.11.2016 - Rs.3,00,000/- 13.12.2016 - Rs.9,50,000/- (Total: Rs.12,50,000/-) Such Cash was deposited on account of demonetization announced on 08.11.2016. Assessment proceedings were initiated and notices were issued which remained non-complied on account of lack of guidance of proper channel of response to the assessee. Due to this, an ex-parte assessment was made u/s 144 of the Income Tax Act, 1961 wherein the Ld. AO only considered the Cash Deposits made by the assessee completely ignored the Cash withdrawals made by the assessee which is completely verifiable from the Bank Account statement of the Assessee. Thus, the Cash deposit made by the assessee is merely a redeposit of Cash. Since the assessee is engaged in the Agricultural activities, Cash is always make payments for purchase of goods from other Farmers & Agriculturist is a routine system of all fellow farmers and the same system is followed by the appellant. I.T.A.No.893/Del/2024 4 When the government announced demonetization, there was no alternate was left with the appellant but to deposit the available cash in the bank. This is well established and verifiable from the Bank statement itself that the cash was withdrawn from the bank and the available cash in hand which was not used anywhere else, was used to make such Bank deposit. A brief Cash flow statement is being re-drafted here to prove the availability of Cash in hand with the assessee: DATE CASH WITHDRAWALS/INCOME CASH DEPOSITS BALANCE REMARKS Opening Cash in Hand 1,50,000 - 1,50,000 Opening Cash in Hand out of previous Income and Savings 21.03.2015 5,00,000 - 6,50,000 Cash withdrawal from Same Bank 01.06.2015 2,00,000 - 8,50,000 Cash withdrawal from Same Bank 10.08.2015 1,50,000 - 10,00,000 Cash withdrawal from Same Bank 03.02.2016 1,00,000 - 11,00,000 Cash withdrawal from Same Bank 31.03.2016 2,25,000 - 13,25,000 Net income of the FY 2015- 16 03.09.2016 25,000 - 13,50,000 Cash withdrawal from Same Bank 31.10.2016 1,50,000 - 15,00,000 Net Income during the year upto 31.10.2016 11.11.2016 - 3,00,000 12,00,000 Cash deposit in same bank 13.12.2016 - 9,50,000 2,50,000 Cash deposit in same bank TOTAL 15,00,000 12,50,000 - Thus, where the source of Cash in Hand available with the assessee is justified and verifiable from the Bank Account Statement, the I.T.A.No.893/Del/2024 5 same cannot be called as unexplained and hence this appeal is preferred.” 5. None of the above submissions were considered by the Ld. CIT(Appeals). Therefore, this appeal is restored to the file of the Ld. CIT(Appeals) for deciding afresh in accordance with law after providing adequate opportunity of being heard to the assessee. 6. In the result, appeal of the Assessee is allowed for statistical purpose. Order pronounced in the open court on 28/04/2025 Sd/- (C.N. PRASAD) JUDICIAL MEMBER Dated: 28.04.2025 *Kavita Arora, Sr. P.S. Copy of order sent to- Assessee/AO/Pr. CIT/ CIT (A)/ ITAT (DR)/Guard file of ITAT. By order Assistant Registrar, ITAT: Delhi Benches-Delhi "