SH. SHIV KANT SHARMA,DHOLPUR vs. ITO, WARD-4, BHARATPUR, BHARATPUR

IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, “SMC” BENCH, JAIPUR BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA No. 1580/JPR/2025 (Assessment Year:2017-18)

Shiv Kant Sharma Vs. ITO S/o Sh. Babu Lal Sharma, Ward 4 Santar Road Dholpur, Bharatpur 328034 �थायीलेखासं./जीआइआरसं./PAN/GIR No:AOZPS 6031A Appellant .. Respondent

Appellant by : Sh. P.C. Parwal Respondent by : Sh. Gaurav Awasthi, JCIT

Date of Hearing 04.06.2026 Date of Pronouncement 25.06.2026 O R D E R The present appeal has been filed by the assessee against the order passed by the National Faceless Appeal Centre (hereinafter referred to as “Ld. CIT(A)”), dated 02.09.2025 u/s 250 of the Income Tax Act, 1961(hereinafter referred to as “the Act”). 2. The grounds of the appeal raised by the assessee read as under:- 1. The Ld. CIT(A), NFAC has erred on facts and in law in upholding the addition of Rs. 10,97,000/- made by AO u/s 69A of the Act on account of cash deposit made during the demonetization period by not accepting the source of deposit in the bank account.

P a g e | 2 ITA No. 1580/JPR/2025 Shiv Kant Sharma 2The lower authorities have erred on facts and in law in taxing the alleged amount u/s 115BBE at the rate of 60 per cent instead of taxing the same at the rate of 30 per cent by ignoring that section 115BBE substituted by Taxation Laws (Second Amendment Act), 2016 which received the assent of President on 15.12.2016 and made applicable from 01.04.2017 is applicable to any transaction from 01.04.2017 onwards and not to any transaction prior to 01.04.2017 as held by Honble Madras High Court in case of SMILE Microfinance Ltd. Vs. ACIT vide order dt. 19.11.2024. 3 The appellant craves to alter, amend and modify any ground of appeal. 4Necessary cost be awarded to the assessee. 3. The solitary issue in the present appeal relates to addition made to the income of the assessee on account of cash deposited in his bank account to the tune of Rs.10,97,000/-during demonetization period source of which remained unexplained. 4. Ld. Counsel for the assessee contended before me that the assessee was an Advocate ,75 years of age, earning income from house property and FDR interest. That cash of Rs.10,97,000/- was deposited in his two bank accounts, i.e, YES Bank Rs.2.46 lakhs and Bank of Baroda Rs.8.51 lakhs. He contended that the YES bank account was of the HUF of the assessee, but this contention of the assessee was disbelieved by the authorities below since the bank account was being maintained in his individual name. The ld. Counsel for the assessee substantiated his contention before me, pointing out that in the return filed of the HUF of the assessee for the impugned assessment year i.e. AY 2017-18 the bank account mentioned was of YES Bank, the same Bank account in which cash deposited to the tune of Rs.2.46 lakhs was noted to be made by the assessee by the AO. In this regard, he drew my attention to the computation of income and the return of income filed

P a g e | 3 ITA No. 1580/JPR/2025 Shiv Kant Sharma by the assessee HUF for the impugned year placed before me at Paper Book Page 17-19. 5. With regards to the cash deposited by the assessee in his bank account in Bank of Baroda amounting to Rs.8.51 lakhs, he contended that it was explained to the Authorities below, that the deposit was made out of withdrawals made earlier in March 2016. Ld. Counsel for the assessee pointed out that the Authorities below disbelieved the explanation of the assessee, since the withdrawal was made quite a long time before re-deposit of the same in the bank account of the assessee during demonetization. 6. Before me, ld. Counsel for the assessee contended that for all deposit of cash during demonetisation in the Bank of Baroda account, the assessee had submitted the cash transaction detail to the Income Tax Department on a specific query raised in this regard post demonetization itself, stating therein the source of deposit as out of cash withdrawn in March 2016 which could not be utilized and hence re-deposited. Copy of the Cash Transaction Statement, in which the assessee was asked by the Department to explain the source of cash deposited during demonetization period, was placed before me at paper book Page No.13. 7. He further pointed out, that even HUF of the assessee had submitted a Cash Transaction Statement to the Income Tax Department, similarly explaining the source of the cash deposited in its bank account in YES Bank of Rs.2,46,000/-, as from shop rent received from its tenant. Ld. Counsel for the assessee further pointed out, from

P a g e | 4 ITA No. 1580/JPR/2025 Shiv Kant Sharma the return of income and computation of the income of the HUF, that it had returned shown rental income earned during the year of Rs.4,04,000/- which substantiated the source of cash deposited in the bank account of the HUF of Rs.2,46,000/- as out of rental income. 8. He further pointed out that even the assessee in his individual capacity had shown rental income earned to the tune of Rs.4,83,000/- which sufficiently substantiated the deposit of cash in its YES Bank account to tune of Rs.2,46,000/-. 9. He therefore contended that the source of cash deposited in the Bank account to the tune of Rs.10,97,000/- stood duly explained and therefore, the addition made by the Authorities below was not justified. 10. Ld. DR however, supported the orders of the Authorities below. 11. Having heard both the parties. I find merit in the contention of the ld. Counsel for the assessee that the source of cash deposited in the bank account of the assessee to the tune of Rs.10.97 lakhs stood duly explained. 12. The assessee’s explanation of deposit in his Bank of Baroda account to the tune of Rs.8.51 lakhs as out of withdrawals made previously in the month of March is substantiated by the fact that this explanation was offered by the assessee to the Income Tax Department earlier also in the Cash Transaction Statement explaining source of cash deposited during demonetisation . It is therefore not an afterthought explanation offered during assessment proceedings. Moreover merely because the withdrawal was made some months prior to its redeposit is not sufficient basis, I hold, for rejecting the

P a g e | 5 ITA No. 1580/JPR/2025 Shiv Kant Sharma explanation, since the Revenue also has not been able to establish utilization of the withdrawn amount for some other purpose. 13. As for the explanation of source of cash deposited in the YES Bank account, the assessee has duly demonstrated before me that the YES bank account belonged to the HUF of the assessee, since it was reflected in the return filed by the HUF of the assessee and even in the Cash Transaction Statement submitted to the Income Tax Department explaining source of cash deposit in the YES bank account on behalf of the HUF of the assessee also. Besides the source of the cash deposited also stands duly explained since the assessee both in his individual capacity and as HUF was earning sufficient rental income to justify the cash deposit in the bank account. In view of the same, I hold that the source of cash deposit in the bank account of the assessee to the tune of Rs.2.46 lakhs stood duly explained. 14. The addition therefore made to the income of the assessee amounting to Rs.10,97,000/- is deleted. 15. In effect, the appeal of the assessee is accordingly allowed. Order pronounced in the open court on 25.06.2026

Sd/- (Annapurna Gupta) ACCOUNTANT MEMBER Dated 25.06.2026 Mittali, Sr. PS Copy forwarded to:

P a g e | 6 ITA No. 1580/JPR/2025 Shiv Kant Sharma 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT By Order, Asst. Registrar ITAT, Jaipur