MADAM GOPAL AGARWAL,DELHI vs. ITO WARD 1(4), GHAZIABAD

PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.735/Del/2019 for AY 2015-16, arise out of the order of the Commissioner of Income Tax (Appeals), Ghaziabad [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No. 360576021100118 dated 31.12.2018 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 27.12.2017 by the Assessing Officer, ITO, Ward-1(4), Ghaziabad (hereinafter referred to as ‘ld. AO’). 2. The only issue to be decided in this appeal is as to whether the ld CITA was justified in confirming the addition of ₹92,45,000/- made on account of cash deposits made in the bank u/s 69 read with section 115BBE of the Act in the facts and circumstances of the instant case. Shri Madan Gopal Agarwal 3. We have heard the rival submissions and perused the material available on record. The return of income for assessment year 2015-16 was filed by the assessee on 20.02.2017 declaring total income of ₹9,60,190/- comprising of the following: – A Income from business 5,29,750/- B. Income from other sources 5,90,437/-

Total
11,20,187/-

Less: Deductions under Chapter
VIA
1,60,000/-

Total
9,60,190/-

Business income comprises of the following :- a.
Income from Bhatta rent
66,00,000/- b.
Miscellaneous receipts
21,875/-

Total - (A)
66,21,875/-

Expenses on interest paid on loan
50,36,086/-

Salary and wages
18,30,000/-

Daily expenses
10,122/-

Bank charges
2,15,917/-

Total - (B)
60,92,125/-

Net profit (A)-(B)

5,29,750/-
4. The assessee made the cash deposit of ₹92,45,000/- during the year under consideration in his saving banks account maintained with State Bank of Patiala, Laxmi Nagar, Delhi. Assessee was asked to explain the source of cash deposit. The assessee explained that the cash deposits were made on various dates during the year under consideration out of Bhatta rent received in cash in the sum of ₹5,50,000/- per month and the cash withdrawals made during the year from the Bank account from time to time. The assessee also filed the Shri Madan Gopal Agarwal complete copy of cash book for the period 01.04.2014 to 31.03.2015, which is also enclosed in Pages 33 to 35 of the paper book filed before us. The assessee also justified the genuineness of the receipts of bhatta rent by furnishing the rent agreement dated 01.11.2013 to 30.09.2014
and for the period 01.10.2014 to 31.08.2015. These rental agreements enclosed in pages 36 to 40 of the paper book. Apart from this, the assessee filed a complete ledger account of bhatta receipts, interest receipts on loans, interest paid on loans, details of capital account, loan taken from Cholamandalam, loan statement and bank statement along with audited books of account. The ld AO did not heed to the contentions of the assessee and proceeded to treat the cash deposit made in the bank account in the sum of ₹92,45,000/- as unexplained investment u/s 69 read with section 115BBE of the Act and completed the assessment.
This action was upheld by the ld CIT(A).
5. It is not in dispute that the assessee had indeed furnished the cashbook for the whole financial year 2014-15, relevant to assessment year 2015-16. On perusal of the said cashbook enclosed in pages 33 to 35 of the paper book, we find that there is absolutely no negative cash balance, even on a single day with the assessee. On several dates of cash deposits made in the bank account, the assessee indeed had sufficient cash balance in its kitty either out of opening balance of ₹36,18,454/-; or out of bhatta rent of ₹5,50,000 per month or out of miscellaneous receipts or out of cash withdrawals. It is the onus cast on the revenue to prove that cash withdrawal and other cash receipts of the assessee were already spent by the assessee for his business or personal purposes, and that the same is not available as a source to explain the cash deposit made in the bank account. This onus has not been discharged by the revenue in the instant case.
Shri Madan Gopal Agarwal
6. In view of the said observations, we hold that assessee had duly explained the sources of cash deposits made in the bank account in the sum of ₹92,45,000/- and no part of it could be treated as unexplained warranting any addition u/s 69, read with section 115BBE of the Act.
Accordingly, the grounds raised by the assessee are hereby allowed.
7. In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 08/08/2025. - - (VIMAL KUMAR)
ACCOUNTANT MEMBER

Dated:08/08/2025
A K Keot