RAVINDER DEEP SINGH SEKHON,LUDHIANA vs. ITO WARD 6 (1), LUDHIANA

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ITA 1689/CHANDI/2025Status: DisposedITAT Chandigarh11 May 2026AY 2010-113 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal found a reasonable nexus between cash withdrawals from an old bank account and deposits into a new one. Since the assessee provided an agreement to sell, the onus shifted to the revenue to rebut the claim, which they failed to do.

What were the facts?

The assessee's case was reopened due to AIR information about a cash deposit of Rs. 46.20 Lacs. The assessee claimed the deposit was from an advance received for a land sale, which was later cancelled and refunded. The Assessing Officer added the amount as unexplained cash deposits.

What were the issues?

Whether the cash deposit of Rs. 46.20 Lacs was unexplained, and if the assessee had discharged the onus of proving the source of the deposit.

Which sections of the Income-tax Act were involved?

Section 147,Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, CHANDIGARH

Before: HON’BLE SHRI LALIET KUMAR, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, CHANDIGARH HYBRID HEARING BEFORE HON’BLE SHRI LALIET KUMAR, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं. / ITA No.1689/CHANDI/2025 (िनधा�रण वष� / Assessment Year: 2010-11) Shri Ravinder Deep Singh Sekhon ITO Ward 6(1) Village Phullanwal, Model Town Aayakar Bhawan बनाम/ Vs. Ludhiana, Punjab - 141002 Rishi Nagar Ludhiana �ायीलेखासं./जीआइआरसं./PAN/GIR No. ATYPS-6954-N (अपीलाथ�/Appellant) (��थ� / Respondent) : अपीलाथ�कीओरसे/ Appellant by : Sh. Sudhir Sehgal (Advocate) – Ld. AR (Virtual) ��थ�कीओरसे/Respondent by : Sh. Dr. Ranjit Kaur (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 06-05-2026 घोषणाकीतारीख /Date of Pronouncement 11-05-2026 : आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2010-11 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 16-10-2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 147 r.w.s. 144 of the Act on 26-12-2017. The sole grievance of the assessee is confirmation of addition of cash deposit for Rs.46.20 Lacs. Having heard rival submissions, the appeal is disposed-off as under.

2.

Pursuant to AIR information of cash deposit by the assessee, the case of the assessee was reopened and notice u/s 148 was issued on 29-03-2017. The assessee remained non-compliant and accordingly, the deposit of Rs.46.20 Lacs was added as unexplained cash deposits. 3. During first appeal, the assessee furnished additional evidences which were subjected to remand proceedings. It was stated that the deposits were made in two Axis Bank accounts. The assessee entered into an agreement to sell agricultural land with Shri Prem Singh and received advance of Rs.25 Lacs on 15-04-2009. Out of the same, Rs.23 Lacs was deposited in the bank account. The said amount was withdrawn subsequently and the account was closed on 08-05-2009. Another account was opened and cash of Rs.23.70 Lacs was deposited out of earlier withdrawals. The agreement was cancelled since the land was in dispute with state for which relevant documents were furnished. Considering the same, the advance amount was refunded to the purchaser. However, Ld. AO, in the remand report, observed that no agreement to sell or any other document was submitted to prove that the amount was related to advance received. No plausible explanation as furnished to close the old account, open new bank account and deposit the same cash which was withdrawn from old account. Concurring with the same, Ld. CIT(A) confirmed the addition against which the assessee is in further appeal before us. 4. From the facts, it clearly emerges that the asssessee has made initial deposit of Rs.23 Lacs out of advance received under an agreement to sell. The old account was closed and the amount was

withdrawn in cash. Subsequently, new account was opened and the cash so withdrawn was deposited din the same bank account. Upon perusal of bank accounts, we find that there is reasonable nexus of cash withdrawals from old account and deposit of the same in the new bank account. Therefore, the source of deposit in new bank account could not be doubted. So far as the claim of advance amount is concerned, we find that the assessee had furnished copies of agreement to sell in support of this claim. However, no enquiry has been made by Ld. AO from the purchaser of land. Once the assessee has discharged his onus of establishing the source of deposits, the onus would shift on revenue to rebut the claim of the assessee. Having not done so, the claim of the assessee is to be accepted. On these facts, the impugned addition stand deleted. We order so. 5. The appeal stand allowed. Order pronounced on 11th May, 2026.

-Sd- -Sd- (LALIET KUMAR) (MANOJ KUMAR AGGARWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AS Dated: 11-05-2026 आदेश की �ितिलिप अ�ेिषत /Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF ASSISTANT REGISTRAR ITAT CHANDIGARH

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