CH DARYA SING,DEHRADUN vs. DCIT,CIRCLE 1(1)(1), DEHRADUN

Brief facts of the case are that the assessee is an individual and deriving income from salary from the employer Charan Singh Memorial Educational Society, Dehradun and also deriving rental income from house property from Ch. Charan Singh Memorial Education Society and Om Hostel. Apart from this, he is also deriving interest income. The assessee e-filed his return of income on 30.03.2015, declaring total income of INR 15,28,340/-. The case was selected for limited scrutiny for a reason that large cash was deposited in the Saving Bank Account and notice u/s 143(2) was issued on 31.08.2015. Thereafter, various notices u/s 142(1) were issued from time to time however, the assessee has failed to make compliance of any of the notices issued by the AO. Thereafter, the AO sought information from the bank and it was found that there are three [03] bank accounts maintained with Axis Bank GMS Road, Dehradun wherein total cash of INR 1,17,05,000/- was deposited and in absence of the explanation with regard to the source of such deposits, the AO has made the addition of the cash deposited at INR 1,17,05,000/- u/s 69A of the Act by treating the same as unexplained money.

Against the said order, assessee filed an appeal before ld. CIT(A) who vide order dated 12.12.2025, dismissed the appeal of the assessee. It is observed that before the ld. CIT(A), the assessee has filed additional evidences explaining the source thereof and further claimed that one of the Account No. 91301001128321675 was in the name of his wife Smt. Omwati, who is separately assessed to tax and having her independent source out of which total cash of INR 32,95,000/- was deposited by her in the said bank account. For the remaining amount, the assessee has further explained the source out of bank

Aggrieved by the order of ld. CIT(A), assessee is in appeal before the Tribunal by taking various grounds of appeal mentioned in the appeal memo.

During the course of hearing, ld.AR for the assessee submits that additions have been made u/s 69A of the Act whereas assessee has been able to explain the source thereof, therefore, provisions of section 69A could not be invoked in the instant case. With respect to the additions made, ld.AR drew our attention to page 15 of the Paper Book which is fund flow statements submitted before the lower authorities, according to which assessee has claimed that he is the President of Chaudhary Charan Educational Society from where has received cash on various occasions as imprest which was utilized for making cash deposits in the bank account. In support of the claim, assessee filed the copy of ledger account and the cash book of the society wherein cash given to the assessee was duly recorded. Ld.AR further submits that besides this, the assessee has withdrawn cash from the bank accounts which was re-deposited and accordingly, submits that as per the fund flow statement, there was a deficit of INR 13,32,000/- which at the most, could be held as unexplained money in the hands of the assessee and requested for the deletion of the remaining addition made towards cash deposited in the two bank accounts belonging to himself. With respect to the cash deposited of INR 32,95,000/- in the bank account of his wife, ld.AR submits that she is regularly assessed to income tax and had duly disclosed the said bank account in her financial statements filed alongwith return of income which were duly audited. Ld.AR submits that Smt. Omwati was the owner of the bank account and this fact was also admitted in the Remand Report. The assessee further filed copy of the said statement in support of the claim made which is placed at page 50 of the Paper Book. He

On the other hand, ld. Sr. DR for the Revenue vehemently supported the orders of the lower authorities and submits that AO in the Remand Report, has examined these facts and for this, the ld. Sr. DR drew our attention to pages 15 to 21 of the appellate order wherein Remand Report is reproduced by ld. CIT(A). Regarding the bank account owned by Smt. Omwati, wife of the assessee, ld. Sr. DR drew our attention to the observations made in in para 8 of Remand Report wherein the AO has stated that the assessee has not given any explanation as to the source of cash in the hands of Smt. Omwati and, therefore, requested for the confirmation of the additions so made by the AO.

Heard the contentions of both parties at length and perused the material available on record. The AO has made the addition for cash deposited in three [03] bank accounts which are as under:-

Out of the aforesaid three [03] bank accounts, the account having last digit of [1675] was in the name of wife of the assessee i.e. Smt. Omwati and copy of the same is placed at page 14 which was submitted before ld. CIT(A) and to the AO in remand proceedings. From the perusal of the bank accounts, it is observed that the said bank account was in the name of Smt. Omwati and the

Regarding the deposited in remaining two [02] bank accounts, from the perusal of fund flow statement placed at page 15 of the Paper Book, it is observed that there was negative cash balance of INR 95,000/- on 06.12.2013 and further negative cash balance of INR 13,32,000/- on 21.02.2014. Therefore, these two [02] negative cash balance totaling to INR 14,27,000/- at the most could be held as the amounts for which no explanation was tendered by the assessee. Accordingly, we restrict the addition to INR 14,27,000/- and the remanding addition is hereby, deleted. Hence, all Grounds of appeal raised by the assessee are partly allowed.

In the result, appeal of the assessee is partly allowed.