INCOME TAX OFFICER, DELHI vs. ATUL AGGARWAL, DELHI

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ITA 3916/DEL/2024Status: DisposedITAT Delhi04 July 2025AY 2017-18Bench: SHRI YOGESH KUMAR U.S. (Judicial Member), SHRI AVDHESH KUMAR MISHRA (Accountant Member)1 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the CIT(A) did not err in deleting the addition. The Assessee provided a certificate and MOU to prove they were a Banking Corresponding Agent for the bank, and the deposits were on behalf of the bank. The bank's non-response to a notice under Section 133(6) was not sufficient grounds to make the addition.

What were the facts?

The Assessee deposited a significant amount of cash in their bank account during the demonetization period, which was treated as unexplained by the AO, leading to an addition under Section 68 of the Income Tax Act. The CIT(A) allowed the Assessee's appeal, deleting the addition.

What were the issues?

Whether the addition made by the AO on account of unexplained cash deposits during the demonetization period was justified, given the Assessee's evidence of being a Banking Corresponding Agent.

Which sections of the Income-tax Act were involved?

Section 143,Section 68,Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI

Before: SHRI YOGESH KUMAR U.S. & SHRI AVDHESH KUMAR MISHRA

Hearing: 03/07/2025Pronounced: 04/07/2025
1.

The present appeal is filed by the Assessee against the order of Ld. Commissioner of Income Tax (Appeals)/ National Faceless Appeal Centre (‘NFAC’ for short), New Delhi dated 02/07/2024pertaining to Assessment Year 2017-18.

2.

Brief facts of the case are that, the Assessee filed return of income atRs. 71,490/-. The case of the Assessee was selected for scrutiny in the ‘limited category’. Subsequently, notice u/s 143 of the Income Tax Act, 1961 ('Act' for short) was issued and served upon the Assessee. An assessment order came to be passed on 27/12/2019 by making an addition of Rs. 1,89,98,000/- u/s 68 of the Act on account of unexplained deposit of cash. Aggrieved by the assessment order dated 27/12/2019, the Assessee preferred an appeal before the CIT (A). The Ld. CIT(A) vide order dated 02/07/2024, allowed the Appeal of the Assessee. As against the order of the Ld. CIT(A), the Department preferred the present Appeal.

3.

The Ld. Departmental Representative vehemently submitted that the Ld. CIT(A) committed error in deleting the addition without examining the fact as to whether the Assessee is authorized to accept the Specified Bank Notes during the demonization period or not.

Further submitted that, though the bank has not responded to the notice u/s 133(6) of the Act during the assessment proceedings, the Ld. CIT(A) has deleted the addition which erroneous and the order of the Ld. CIT(A) requires to be set aside by the Tribunal.

4.

None appeared for the Assessee. Considering the issue involved in the present Appeal, we deem it fit to decide the Appeal on hearing the Ld. Departmental Representative and verifying the material available on record.

5.We have heard the Ld. Departmental Representative and perused the material available on record. The Ld. A.O. on examination of ITR of the Assessee for Assessment Year 2017-18, observed that the Assessee deposited cash of Rs. 1,89,98,000/-during the demonization period i.e. 09/11/2016 to 30/12/2016 in his bank account maintained at Punjab National Bank. The A.O. issued notice u/s 133(6) of the Act to the Punjab National Bank which confirmed that the Assessee was itsBusiness Corresponding Agent. However, no reply was received by the A.O. in respect of acceptance of ‘Special Banking Notes’. Therefore, the cash deposited in the accounts of the Assessee has been treated as unexplained and made addition u/s 68 of the Act and made addition in the hands of the Assessee.

6.

During the first appellateproceedings, the Assessee submitted the certificate issued by the concerned branch of the bank, wherein it was mentioned that the Assessee was the Business Corresponding Agent of the bank and the concerned account wherein the cash was deposited was a BCA. Further, Assessee has also produced ‘Memorandum of Understanding’entered into by the Assessee and the bank to prove that the Assessee was a Banking Corresponding Agent working for Punjab National Bank and the cash deposits on the account was on behalf of the bank.

7.

It is a matter of fact that during the assessment proceedings, the concerned bank has not responded to the noticeissued u/s 133(6) of the Act, however during the appellate proceedings the Assessee has produced certificate issued by the bank confirming that the Assessee was the Business Correspondence Agent of the bank and also produced the MOU to prove that the Assessee was a BankingCorresponding Agent working for Punjab National Bank and the cash deposits on that account was on behalf of the bank. Merely because the bank has not responded to the notice issued u/s 133(6) of the Act in the manner the A.O. expected cannot be a basis for making the additions in the hands of the Assessee when the Assessee has produced cogent documents in support of his claim. Even the Department has not brought anything on record to prove that the document so relied by the Assessee during the first appellate proceedings are not genuine. Therefore, we find no error or infirmity in the order of the Ld. CIT(A) in deleting the addition.

Accordingly,finding no merits in the grounds of Appeal of the Revenue, the Grounds of Appeal of the Revenue are dismissed.

8.

In the result, the Appeal of the Revenue is dismissed.

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