SANJU RATHI,JODHPUR vs. ITO, WARD-3(4), JODHPUR

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ITA 547/JODH/2024Status: DisposedITAT Jodhpur07 August 2026AY 2017-186 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Assessing Officer was not justified in rejecting the documentary evidence with general statements. Considering the assessee's consistent stand, the fact that she offered capital gains in AY 2012-13, and the changing cash balance, the Tribunal found merit in her explanation.

What were the facts?

The assessee deposited a substantial amount of cash in her bank account, including during the demonetization period. She claimed the deposits were from cash accumulated from the sale of property in AY 2012-13, which was kept in a locker and lent out. The Assessing Officer rejected her explanation and cash book/balance sheet as fabricated and unaudited.

What were the issues?

Whether the assessee adequately explained the source of cash deposits in her bank account, and if the rejection of her documentary evidence by the Assessing Officer was justified.

Which sections of the Income-tax Act were involved?

Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JODHPUR BENCH, JODHPUR

For Appellant: Shri Rajendra Jain, Advocate and Smt, CA (Physical)
For Respondent: Ms. Nidhi Nair, Addl. CIT-DR (Physical)

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT AND SHRI MAKARAND VASANT MAHADEOKAR, HON’BLE ACCOUNTANT MEMBER

ITA No. 547/Jodh/2024 (Assessment Year – 2017-18)

Sanju Rathi Income Tax Officer C/o Rajendra Jain Advocate, Ward – 3(4) 106, Akshay Deep Complex, 5th Jodhpur B Road, Sardarpura, Jodhpur - 342001 PAN No. ADOPR 7654 N Assessee by Shri Rajendra Jain, Advocate and Smt. Raksha Birla, CA (Physical) Revenue by Ms. Nidhi Nair, Addl. CIT-DR (Physical) Date of Hearing 04 / 08 / 2026. Date of Pronouncement 07 / 08 / 2026.

ORDER PER: SHRI SAKTIJIT DEY, V.P.: This is an appeal by the assessee against order dated 30.04.2024 passed by National Faceless Appeal Centre, NFAC, Delhi for the Assessment Year 2017-18.

2.

The dispute in the present appeal is confined to addition of an amount of Rs. 50,00,000/- on account of cash deposit in the bank account during the relevant financial year.

2 ITA No. 547/Jodh/2024 Asst. Year: 2017-18 3. Briefly stated, the assesse is an individual. In the assessment year under dispute, the assessee filed its return of income on 19.03.2018 declaring income of Rs. 2,44,340/-, which was subsequently revised to Rs. 4,66,330/- The return of income so filed by the assessee was selected for scrutiny to examine the source of cash deposits in the bank account during the year. In course of assessment proceedings, the Assessing Officer noticed that the assessee had deposited substantial amount of cash in her account with Canara Bank both during demonetisation period and before that. Hence, he called upon the assessee to prove the source of such cash deposit. In response to the query raised, the assessee furnished cash book, balance sheet, etc. and stated that the cash deposits in bank account were out of cash available with her in safe. Explaining further, the assessee submitted that in the assessment year 2012-13, the assessee had sold an immovable property and received sale consideration or Rs. 49,77,000/- and Rs. 30,21,000/- in cash. It was submitted that the capital gain arising out of such sale was offered to tax in assessment year 2012-13 and the amount received in cash was kept in the locker, out of which, cash loan was given to various persons from time to time on interest. It was submitted by the assessee that the cash deposits during the demonetisation period or otherwise were out of

3 ITA No. 547/Jodh/2024 Asst. Year: 2017-18 such cash deposits. In support of such contention, the assessee furnished a cash book and balance sheet showing availability of cash. The Assessing Officer, however, was not satisfied with the submissions of the assessee. According to the Assessing Officer, the cash book appears to be fabricated and unaudited balance sheet cannot be relied upon.

4.

Thus, ultimately he held that since the assessee failed to explain the source of cash deposits, an amount of Rs. 50,00,000/- has to be treated as unexplained money u/s 69A of the Act. Accordingly, he added back the amount to the income of the assessee. Though, the assessee contested the aforesaid addition before the First Appellate Authority, however, she was unsuccessful.

5.

We have considered rival submissions and perused the materials on record. While the Ld. Counsel for the assessee reiterated the stand taken before the departmental authorities, Ld. Departmental representative relied upon the observations of the Departmental Authorities.

6.

On perusal of materials placed before us as also on reading of the assessment order, it appears that from the stage of assessment proceedings itself, the assessee had consistently taken the stand that cash deposits in the bank account were out of accumulated cash kept in the locker. The fact that the

4 ITA No. 547/Jodh/2024 Asst. Year: 2017-18 assessee had received cash on sale of immovable property in assessment year 2012-13 has not been disputed by the Departmental Authorities. The receipt of cash on sale of immovable properties is vindicated by the capital gain offered by the assessee in assessment year 2012-13. Therefore, the issue which arises for consideration is whether it is probable for the assessee to hold the cash for such duration and deposit in the impugned assessment year. Though, it may appear a little improbable for anyone to hold cash for such long period, however, in the facts of the present case, the assessee through cash book and balance sheet has demonstrated availability of cash at hand and in the locker.

7.

Ofcourse, the Assessing Officer has rejected the cash book and balance sheet stating that cash book is fabricated and balance sheets are unaudited. In our view, the Assessing Officer is not justified in rejecting the documentary evidences with such general statement.

8.

Fact remains that the assessee regularly files her return of income. Thus, it cannot be denied that the assessee has genuine source of income. Further, the Assessing Officer himself has stated that there are not only cash deposits but substantial cash withdrawals from the bank account. The cash withdrawals from bank account have been held against the assessee by the Assessing Officer on the

5 ITA No. 547/Jodh/2024 Asst. Year: 2017-18 reasoning that if the assessee had sufficient cash balance, there was no need to withdraw cash from the bank account.

9.

In our view, such reasoning of the Assessing Officer may not be valid as the assessee had stated that the cash available in the locker was advanced as loan to various persons on interest. There appears to be some truth in the aforesaid statement of the assessee considering the fact that the cash at safe shown in the balance sheet is not a constant figure but has kept changing. Thus, keeping in view the aforesaid factual position, benefit of doubt can be given to the assessee. Thus, on overall consideration of facts and materials on record, we are inclined to hold that the assessee has been able to explain the source of cash deposits in the bank account. Accordingly, we direct the Assessing Officer to delete the addition.

10.

In the result, the appeal is allowed.

Order pronounced in the open court on 07/08/2026.

Sd/- Sd/- (MAKARAND VASANT MAHADEOKAR) (SAKTIJIT DEY) ACCOUNTANT MEMBER VICE PRESIDENT Dated : 07/08/2026. Nimisha, Sr. PS

6 ITA No. 547/Jodh/2024 Asst. Year: 2017-18 True Copy Copies to : (1) The appellant. (2) The respondent. (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File BY ORDER,

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