SUNITA GUPTA,DELHI vs. ITO, NEW DELHI

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ITA 841/DEL/2026Status: DisposedITAT Delhi24 April 2026AY 2017-184 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the cash deposit was made in the bank account of M/s. Praveen Iron Store under the proprietorship of Ms. Seema Aggarwal, not the assessee. Therefore, the addition made by the AO was incorrect.

What were the facts?

The assessee, Sunita Gupta, was the erstwhile proprietor of M/s. Praveen Iron Store until June 2013, after which her sister, Seema Aggarwal, took over. During demonetization, Rs. 12,00,000 was deposited in the firm's bank account. The Assessing Officer made an addition of this amount to the assessee's income, citing Section 69A.

What were the issues?

Whether the cash deposit in a firm's bank account, after the proprietorship change, can be added to the income of the erstwhile proprietor under Section 69A.

Which sections of the Income-tax Act were involved?

Section 69A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “SMC”, DELHI

Before: SHRI VIKAS AWASTHY

Hearing: 24/03/2026Pronounced: 24/04/2026

आयकर अपीलीय अधिकरण धिल्ली पीठ “एस एम सी”, धिल्ली श्री धिकास अिस्थी, न्याधयक सिस्य IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं.841/धिल्ली/2026 (धि.ि. 2017-18) ITA No.841/DEL/2026 (A.Y.2017-18)

Sunita Gupta, G-27/133-134, Sector-3, Rohini, New Delhi 110085 ...... अपीलार्थी/Appellant PAN: AAEPG-4214-C बिाम Vs. Income Tax Officer, Ward 36(2), ..... प्रधििािी/Respondent New Delhi 110001 अपीलार्थी द्वारा/Appellant by : Shri S/Shri Vaibhav Aggarwal & V.B Aggarwal, Chartered Accountants प्रधििािीद्वारा/Respondent by : Shri Manoj Kumar, Sr. DR सुििाई की धिधर्थ/Date of hearing : 24/03/2026 घोषणा की धिधर्थ/Date of pronouncement : 24/04/2026 आिेश/ORDER PER VIKAS AWASTHY, JM:

This appeal by the assessee is directed against the order of the Additional/Joint Commissioner of Income Tax (Appeals)-1, Ludhiana [in short ‘the CIT(A)’] dated 08.12.2025, for Assessment Year 2017-18.

2.

Shri Vaibhav Aggarwal, appearing on behalf of the assessee narrating facts of the case submitted that the assessee filed her return of income for AY 2017-18 declaring income of Rs.2,88,050/- from house property and other sources. During the course of scrutiny assessment proceedings, the Assessing Officer (AO) made addition of Rs.12,00,000/- u/s.69A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) on account of cash deposit during demonetization in Dena Bank Account no.128111031030. The ld. Counsel submits that the said account is in respect of M/s. Praveen Iron Store. The assessee was proprietor of M/s. Praveen Iron Stone upto 25.06.2013. Thereafter, the proprietorship was

2 ITA No. 841/DEL/2026 (A.Y.2017-18) transferred in the name of Ms. Seema Aggarwal, as the assessee was not keeping good health and was unable to look after business affairs. The intimation of change of proprietorship was given to the bank. Accordingly, the bank had made the changes in the bank account, but the said bank account continued to be linked with PAN of the assessee. The ld. Counsel further pointed that an application to the Department Trade and Taxes, Govt. of NCT of Delhi was also made on 25.06.2013 regarding change of proprietorship of M/s. Praveen Iron Store. The Department of Trade and Taxes, Govt. of NCT of Delhi carried out necessary changes replacing the name of assessee with Ms. Seema Aggarwal. Thereafter, all quarterly VAT returns were filed by Ms. Seems Aggarwal. The ld. Counsel pointed that on the deposit slips vide which cash was deposited during demonetization, PAN of Ms. Seema Aggarwal was mentioned. To substantiate his submissions, he referred to copies of the deposit slips alongwith PAN of Ms. Seema Aggarwal at page 44 and 45 of the paper book. The ld. Counsel pointed that during the course of assessment, the AO had directed the assessee and Ms. Seema Aggarwal to furnish indemnity bond mentioning about the fact of cash deposit amounting to Rs.12,00,000/- and also the name of person to whom cash belongs. Accordingly, the assessee and Ms. Seema Aggarwal furnished indemnity bond, the same are at page 48 and 50 of the paper book. In the indemnity bond Ms. Seema Aggarwal admitted that the cash deposited during demonetization in the current bank account of M/s. Praveen Iron Store does not belong to the Smt. Sunita Gupta, the assessee. The AO proceeded on to make the addition of Rs.12,00,000-/ in the hands of the assessee without appreciating the documents furnished by the assessee. The assessee carried the issue in appeal before the CIT(A). The CIT(A) upheld the addition by recording wrong facts that the assessee has not submitting any documentary evidence with regard to change

3 ITA No. 841/DEL/2026 (A.Y.2017-18) of proprietorship and any communication letter with bank regarding change in details of proprietorship. The. ld. Counsel for the assessee thus prayed for deleting the addition of Rs.12,00,00/- u/s.69A of the Act.

3.

Per contra, Shri Manoj Kumar, representing the department vehemently supported the impugned order and prayed for dismissing appeal of the assessee.

4.

Both sides heard, orders of the authorities below examined. The short issue in the present appeal is with respect to addition of Rs.12,00,000/- u/s.69A of the Act in the hands of the assessee.

5.

Undisputedly, Rs.12,00,000/- cash was deposited in the current bank account maintained with Dena Bank in the name of M/s. Praveen Iron Store in the month of November 2016 (Rs.9,50,000/- on 17.11.2016 & Rs.2,50,000/- 0n 24.11.2016). The assessee is erstwhile proprietor of M/s. Praveen Iron Store. After 25.06.2013, the assessee ceased to be the proprietor of said firm and Ms. Seema Aggarwal became proprietor w.e.f. 27.06.2013. The assessee has furnished various documents including copy of VAT returns, to show that Ms. Seema Aggarwal had replaced the assessee as proprietor of M/s. Praveen Iron Store. A perusal of the assessment order reveals that the AO had asked the assessee and Ms. Seema Aggarwal to furnish indemnity bond. Both the aforesaid persons had furnished indemnity bonds, however, it appears that the bonds were furnished before the CIT(A) and not before the AO as the indemnity bonds were executed on 03.02.2021 i.e. after passing of the assessment order on 21.12.2019. The ld. Counsel for the assessee has drawn attention of the Bench to the deposit slips (copies at page 44 and 45 of the paper book) vide which cash was deposited during demonetization. A perusal of deposit slips clearly indicates that they bear

4 ITA No. 841/DEL/2026 (A.Y.2017-18) PAN number of Ms. Seema Aggarwal and not the assessee. Considering entire facts of the case and the documents on record, I find merit in submissions of the assessee. The cash was deposited in the bank account of M/s. Praveen Iron Store under the proprietorship of Ms. Seema Aggarwal and not the assessee. Thus, the addition of Rs.12,00,000/- u/s.69A of the Act in the hands of the assessee is directed to be deleted.

6.

In the result, impugned order is set aside and appeal of the assessee is allowed.

Order pronounced in the open court on Friday the 24th day of April, 2026.

Sd/- Sd/- (VIKAS AWASTHY) न्याधयक सिस्य/JUDICIAL MEMBER धिल्ली/Delhi, धििांक/Dated 24/04/2026

NV/- प्रतितिति अग्रेतिि/Copy of the Order forwarded to : अपीलार्थी/The Appellant , 1. प्रधििािी/ The Respondent. 2. 3. The PCIT/CIT(A) धिभागीय प्रधिधिधि, आय.अपी.अधि., दिल्ली /DR, ITAT, धिल्ली 4. गार्ड फाइल/Guard file. 5.

BY ORDER, //True Copy//

(Asstt. Registrar) ITAT, DELHI

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